Tuesday: Stocks Keep Shaking Off Bonds' Downward Tug

Author:
Publish date:

By John J. Edwards III
Staff Reporter

The bond market still is doing its best to lead stocks lower this midday, but equities continue to cold-shoulder their fixed-income counterparts.

Not that the broad stock market is exactly rollicking. The

Dow Jones Industrial Average

just arrived at break-even, while the

S&P 500

is up about 2. Still, the tech-sparked

Nasdaq Composite Index

continues to charge deeper into record territory behind big gains in the usual suspects,

Microsoft

(MSFT) - Get Report

,

Intel

(INTC) - Get Report

and

Cisco

(CSCO) - Get Report

. Cisco's post-close

earnings report today is eagerly awaited, with anticipation having pushed the stock up more than 5 since July 28.

And market internals hardly reflect the influence of a bond market that's seen the yield on the bellwether 30-year Treasury bond bloat by 0.2% in two days.

New York Stock Exchange

advancers are beating decliners by a 13-to-12 margin, and Nasdaq advancers are ahead of losers by an 18-to-16 margin. As of noon EDT, there were 148 new highs on the Big Board and 11 new lows.

"The market does not want to go down," one head trader said. "I think it's a great sign. There's this push and pull, and the bulls are winning."

But the trader acknowledged that an extended decoupling of stock and bond fortunes is untenable for the long term. "It is a little bit troubling, and I think you do need lower rates to push the market higher," he said. "As long as there is that divergence, we're going to be in a trading range. We do need better bonds for better stocks."

*****

Two companies are enjoying the welcome-to-the-S&P-500 effect today. Before noon,

Mirage Resorts

(MIR)

was up 1 3/4 to 27 11/16 and

Huntington Bancorp

(HBAN) - Get Report

was up 3 7/16 to 32. If the companies can hold onto the index-fund-fueled gains, Huntington's price would be an all-time high and Mirage's would be a 52-week high. After today's close, Huntington replaces

Enserch

(ENS) - Get Report

, which is merging with

Texas Utilities

(TXU)

. Mirage steps in Wednesday for

NorAm Energy

(NAE)

, which is being acquired by privately held

Houston Industries

.