Bear Stearns High Yield Index up 1.57% in week, now 14.52% higher in 2003

New York, May 2 - The Bear Stearns High Yield Index rose strongly again, adding 1.57% in the week to May 1.

After the gain, the 11th in a row, the index is now up 14.52% so far this year.

Bear Stearns also reported that the index rose 6.1% in April, the fourth highest monthly return since it began the measure.

"Absent a double-dip recession, we still believe that the market will continue to rally in this low-interest-rate environment, with equities remaining range-bound and trading on a sideways trajectory," wrote Bear Stearns analyst Mike Taylor in his report on the April performance.

He noted that the distressed sub-index outperformed in April, returning 21.95% for a year-to-date return of 44.89%. Boosting this component was airline bonds, Charter, Calpine, Mirant and Pegasus Satellite. For the sub-index, distressed bonds are those with a yield to worst of 20% or more which have not missed a coupon or filed for bankruptcy.

In the week to May 1, all 11 industry groups making up the index showed positive returns.

Transportation led the way with a 7.25% gain, which finally took it out of negative territory for the year so far with a return of positive 5.94%. All 11 groups are now in the black since Jan. 1.

The weakest performance - although still a healthy gain - was in consumer non-cyclicals, which rose 0.92% in the week and is now 3.57% better in 2003, also a last-place performance after being passed by transportation.

Utilities remains the number one sector so far this year with a 38.02% return after adding 2.65% in the most recent week.

Among the narrow sub-sectors making up the broader industry groups, broadband access and internet services took first place with a 63.96% return in the week - although it makes up a minuscule 0.01% of the total index. It is now ahead 99.47% so far in 2003.

Second place was taken by airlines, which returned 11.12%, putting them back among the gainers with a 7.61% return since Jan. 1.

Among the three losers, steel had the worst performance with a 1.40% loss in the week, cutting the year-to-date return to 3.28%.

On a year-to-date basis, aside from broadband access and internet services, the top performer is the IPP component of utilities with a 59.03% return, boosted by a 5.18% performance in the most recent week.

The worst of the two losses was in textile and apparel, down 3.50% after slipping 0.54% in the most recent week.

The index ended the week with a market value of $414.073 billion in 1,552 issues, both up from $408.781 billion in 1,549 issues the previous week.

The yield to worst fell 34 basis points to 9.64% from 9.98% the week before. The yield-to-worst spread fell 50 basis points to 686 basis points.

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