Stocks Jump on Falling Bond Yields

BY

Wall Street Rises As Bond Yields Fall, Manufacturing Data Shows
Growth

Wall Street advanced sharply Monday in the first day trading for the third quarter, boosted by a decline in Treasury yields, a rise in June manufacturing activity and a spate of buyout news.

The Dow Jones industrial average rose more than 100 points after the Institute for Supply Management's June manufacturing index came in at 56.0, slightly higher than the market expected
and indicating stronger expansion than May's reading of 55.0.

The report also showed a decrease in its prices paid index, suggesting that inflation pressures
lifted a bit last month and easing some of the market's worries about the Federal Reserve's interest rate policy.

As inflation concerns lessened, the 10-year Treasury note's yield fell to 5.00 percent from 5.03 percent late Friday, dampened additionally by investors flocking to the safe-haven assets amid ongoing jitters about subprime lending.

The 10-year Treasury note's yield breached the 5 percent level in early June for the first time
since last year, hit a peak of nearly 5.30 percent, and have since retreated. High rates can slow down deal making.