Prudential Securities take on the pull-back yesterday.
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brought to you by Brian Piskoroski.
February 24, 1999, 4:50 p.m. EST
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The bond vigilantes mugged the Bull today. After putting in 4 1/2 hours of hard work, stocks saw their gains wiped out after bonds fell out of bed. Today s 2-year note auction was disappointing, which spurred a sell off in Treasuries. As yields on the 30-year backed up to 5.50%, our Bull began to falter, leading to this afternoon's weakness.
For the record, the Dow Jones Industrials lost 144 points, falling to 9399.67. The NASDAQ Composite shed 37 points, while the Russell 2000 gave up 3.75. Volume was below average, we traded 764 million shares at the Big Board. Breadth was negative by a 17-12 margin.
Today's weakness comes as we approach the higher end of what has become a wide trading range. We have spent the majority of February mired in consolidation. Treasuries have been deteriorating for over two weeks. Breadth and volume have been poor. Monday's 200-point moonshot did not signal a brave new world. From a valuation standpoint, the market was crusin' for a bruisin' and today's weakness in bonds was the catalyst.
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