Bonds Rebound, Nat Gas Slides: Market Bits


NEW YORK ( TheStreet) -- U.S. Treasury bonds were reversing earlier losses after a key Federal Reserve policy maker reaffirmed the central bank's intention to follow through on stimulus plans, despite more signs that the economy has recovered.

The two-year note firmed 1/32, with the yield falling to 0.821%. The ten-year note was ticking 0/32 higher, with the yield pushed down to 3.468% and the 30-year bond increased 3/32, lowering the yield to 4.505%.

The Federal Reserve Bank of New York President, William C. Dudley, told the press, during a visit to San Juan, Puerto Rico, that the central bank still plans follow through with its $600 billion treasury-buying program.

Dudley said the program, expected to conclude at the end of June, was still necessary because of the shaky economic recovery. The policy maker spoke after a strong jobs report was published Friday.


Natural gas futures tumbled Friday on milder weather.

Natural gas for May delivery fell 2% to $4.30 per million British thermal units, breaking a two-day winning streak.

"The heat that was in the West finally plods over to the East Coast by next Thursday, breaking up the cold snap in all but the northernmost parts of New England," a Gelber Natural Gas report stated.

Natural gas players were mostly heading higher Friday afternoon.

Devon Energy ( DVN) gained 0.7% to $92.38, Newfield Exploration ( NFX) added 0.3% to $76.22, Cheniere Energy Partners, L.P. ( CQP) ticked up 0.2% to $19.12, Cheniere Energy, Inc. ( LNG) fell 0.1% to $9.30 and EOG Resources ( EOG) increased 0.3% to $118.89.

Meanwhile, Kinder Morgan Energy Partners LP ( KMP) was flat at $74.12 and BP ( BP) was spiking 3.9% to $45.86.0

(Published at 1:17 pm ET)

Wheat prices were retreating after visiting positive territory Friday as the markets' attention turned away from news that La Nina is threatening to endanger crop yields and back to a bearish stock report.

Wheat for May delivery was falling 1.9% to $7.48 ¾ a bushel, coming off the intraday high of $7.74, as the markets revisited a slightly bearish U.S. Department of Agriculture (USDA) report from Thursday.

Earlier, on Friday morning, wheat was advancing more than 1% as meteorologists warned that leading wheat producers including China and the U.S. would be suffering more drought with the looming La Nina. This, of course, would cause wheat yields to suffer.

The La Nina weather phenomenon refers to the cooling of surface temperatures in the Pacific Ocean.

Still, as noon approached, the markets began revisiting the USDA report that said wheat inventory rose 5% from a year ago to 1.42 billion bushels on March 1.

"We are also seeing some pre-weekend profit taking and selling on wheat to cover margin exposure in corn," said MaxYield Cooperative Grain Solutions Team Leader Karl Setzer.

Soybeans followed suit, falling 1.2% to $13.93 ¾ a bushel for May delivery on news China has cancelled a few export bookings, the analyst said.

Food companies were rising in midday trading.

Sara Lee ( SLE) was rising 1.7% to $17.97, Campbell ( CPB) was up 0.5% to $33.26, Panera Bread ( PNRA) was higher by 0.5% to $127.65 and Kraft ( KFT) was up 0.7% to $31.59.


Corn was extending gains following Thursday's USDA report on lower corn inventories.

Corn for May delivery was rising 5.7% to $7.32 ¾ a bushel Friday after the USDA said corn stocks dropped 15% from a year ago to 6.52 billion bushels on March 1.

Still, Setzer says "we could easily see liquidation to corn to limit margin exposure. A little preweekend profit taking would not be surprising either."

The United Nation says its Food and Agriculture Organization food price index rose above its 2008 peak last December after skyrocketed to its highest level in three decades by mid-2008.

"Food prices will likely remain volatile," the United Nations said.

On a positive note, a Standard Chartered report by analyst Danny Suwanapruti said headline inflation rose further in March in South Korea, but food inflation was showing signs of peaking.

Grain processing companies were advancing in midday trading. Corn Products International ( CPO) was 0.4% higher to $52.03, Archer Daniels Midland Company ( ADM) was up 0.3% to $36.13, Bunge Limited ( BG) was rising 1.7% to $73.57.


(Published at 10:09 am ET)

Treasury bonds were falling Friday morning as a positive employment report triggered thoughts of possible monetary tightening by the U.S. Federal Reserve.

The 2-year note fell 2/32, pushing up the yield to 0.869%. The ten-year note lost 7/32, raising the yield to 3.494% and the 30-year bond fell 12/32, increasing the yield to 4.533%.

iShares Barclays TIPS (Treasury Inflation Protected Securities) Bond Fund ( TIP) fell 0.7% to $108.43.

The selloff came as nonfarm payroll numbers turned out to be much better than expected.

The Bureau of Labor Statistics said in its Employment Situation Report that nonfarm payrolls rose by 216,000 in March, surprising economists, who on average were expecting the figure to increase by 185,000, according to Briefing.com.

Companies added 230 jobs, helping to offset the decline in state and local government payrolls.
>> Economy Adds 216,000 Jobs in March

Treasury exchange traded funds were falling in morning trading.

iShares Barclays 1-3 Year Treasury Bond Fund ( SHY) was falling 0.2% to $83.61, iShares Barclays 20+ Year Treasury Bond Fund ( TLT) was falling 0.7% to $91.49 and iShares Barclays 10-20 Year Treasury Bond Fund ( TLH) was unchanged at $111.80.


The dollar was gaining against the Swiss franc and Japanese yen after the release of the surprising U.S. employment report.

The U.S. dollar was gaining 1.1% against the franc at CHF 0.92869 and 1.3% against the Japanese currency at 84.227 yen.
>> Dollar Glimmers on Employment Data

The greenback was also gaining against the Norwegian krone, up 0.1% to NOK 5.54008, which had outpaced the dollar on Thursday on expectations of interest rate hikes, strong retail sales numbers and a rebound in oil prices.

>> Norwegian Krone Sparkles With Oil

Oil stocks were advancing in morning trading as light sweet crude oil for May delivery fell 0.1% to $106.58 a barrel.

BP ( BP) was rising 2.9% to $45.40, Chevron ( CVX) was rising 0.3% to $107.77, Total S.A. ( TOT) was trading sideways at $60.99.

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-- Written by Andrea Tse in New York.

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