Bear Stearns High Yield Index returns 1.19% for year to Feb. 1

By Angela McDaniels

Seattle, Feb. 2 - The Bear Stearns High Yield Index returned 0.17% for the first day of February and posted a year-to-date return of 1.19%, down from 1.28% in the previous week.

During the most recent week, the yield to worst grew by four basis points to 7.76%. The yield-to-worst spread loosened by seven bps to 290 bps, but continued to come in under the previous all-time tight level of 298 bps.

On the year thus far, all 12 of the industry sectors that make up the index posted positive returns.

The basic materials sector maintained its lead with a return of 2.02% for the year to Feb. 1, up from 1.83% the previous week. Its return for the month to date was 0.12%.

Basics materials got a boost from its forest/paper products subsector, which showed a 3.39% year-to-date return and a 0.18% return on Feb. 1.

The outperformer among the subsectors in the index remains health care sector's diagnostic services component, which saw its year-to-date return jump to 6.59% from 5.63% last week and from 4.65% the week before. Despite a negative 0.32% return for the month to Feb. 1, the subsector thus continued to rebound from its dramatic losses in 2006, when it was the only subsector in the entire index to see a negative return for the year, finishing down 10.36%.

Among the underperformers, the energy sector remains the weakest with a year-to-date return 0.09%, lower than last week's 0.26% year-to-date return. It showed a slightly better performance for the month to Feb. 1 at 0.13%.

Of three subsectors with negative returns for the year to date, energy holds two: integrated, with a negative 0.24% year-to-date return, and exploration and production, with a negative 0.18% year-to-date return.

The third and worst-performing subsector for the year thus far was once again the consumer cyclical sector's lodging component. Its year-to-date return fell to negative 0.49% from negative 0.16% a week earlier, and its return for the month so far was 0.36%.

On Feb. 1, the index had a market value of $615.41 billion, up $1.76 billion from the previous week. The issue count fell to 1,620 from 1,629.

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