Bear Stearns High Yield Index gains 0.35% in week to Jan. 26, now up 1.16% year to date

By Paul A. Harris

St. Louis, Jan. 27 - The Bear Stearns High Yield Index gained 0.35% during the week to Jan. 26, advancing its year-to-date return to 1.16%.

The gain follows the previous week's 0.03% loss.

For the week, the index's yield-to-worst spread tightened by 18 basis points to 378 bps. The yield to worst decreased 5 bps on the week to 8.26%.

The index has reported gains in 56 of the past 84 weeks, with 28 losses.

Bear Stearns high-yield strategist Mike Taylor asserted in a Friday e-mail message that the recently large new issue supply has not dampened junk investors' appetites for the primary market.

"Demand is strong for selective issues as indicated by the way certain new deals are received and trade after being offered," Taylor wrote.

"Despite the large size of some recent new issues, they remain relatively attractive to some investors compared to yields in the secondary market."

Seven of the 11 industry sectors making up the index posted gains in the most recent week.

The consumer cyclical sector was the week's outperformer, returning 0.92%. Its 2.31% year-to-date return is the greatest among the sectors thus far in 2006. Its automobile manufacturing-related component led the advance by returning 1.83% on the week, extending its year-to-date return to 4.24%, rendering it the outperformer among index sub-sectors thus far into 2006.

The consumer non-cyclical sector and the media sector ended the week in a tie for the dubious distinction of underperformer of the week, both dropping 0.06%. Consumer non-cyclical ended the period with a year-to-date return of 0.27%, while media's year-to-date tally stood at 0.42%.

The market value of the index ended the week at $569.17 billion, down from the previous week's $571.35 billion. The number of issues decreased by two to 1,692 issues.

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