Bear Stearns Index down 0.46% in week; YTD loss widens to 0.84%

By Paul Deckelman

New York, Oct. 5 - The Bear Stearns high yield index fell 0.46% in the week ended Oct. 4 - a smaller loss than those seen in the previous two weeks, but a loss nonetheless. In the week ended Sept. 27, the index had fallen 2.19%, following a 3.75% plunge in the reporting period ended Sept. 20.

On a year-to-date basis, the latest weekly loss deepens the index's negative cumulative return to 0.84%; the week before, the sizable loss had dragged the heretofore positive yearly return into negative territory, down 0.38%.

The yield-to-worst on the index widened to 14.39% in the Oct. 4 week, from 14.23% previously, as the spread over Treasuries widened to 1,037 basis points from 1,019 basis points. The index currently covers 1,415 issues (down from 1,424 previously), having a total market value of $284.094 billion, well down from $290.159 billion at the end of the previous measurement period.

Six out of the 11 broad market sectors into which Bear Stearns divides its index lost ground during the week, although that was an improvement from the 10-1 negative split in the previous week. But while the gains recorded by the positive performers were relatively modest, four of the six losing sectors suffered losses of more than a full point - transportation (down 1.70%), technology (down 2.26%), finance (down 3.10%) and the worst-performing sector, telecommunications, which plunged 5.50% on the week.

It was the second consecutive sizable drop for the telecom issues, which as a group had dropped 6.04% in the week ended Sept. 27. The telecom sector has been chronically at or near the bottom most weeks this year, so on a year-to-date basis, it easily remains the worst finisher; the latest week's poor showing widening its cumulative loss to 36.37% from 32.67% the week before.

The single worst performer among the narrow sub-sectors into which Bear Stearns divides the index's broad sectors was paging and messaging, down 55.54% on the week. On a year-to-date basis, the pagers clearly remain the worst finishers in the index, the latest week's swoon serving only to widen their cumulative loss to 91.93% from the 81.85% loss seen the week before.

On the upside, the utility sector did the best with a 0.73% return, with media close behind at 0.72%. In the week ended Sept. 27, finance had been the only broad sector to finish in the black, with a 0.25% gain; in the latest week, however, finance, as noted was one of the poorer finishers.

Among the sub-sectors, gaming cashed in with a respectable 2.29% return. The previous week's top finisher, insurance, which had returned 0.91% that week, dropped 11.29% in the latest week, the main factor behind finance's sizable retreat.

On a year-to-date basis, the consumer non-cyclicals remain the best-performing broad sector, with their return widening slightly to 23.63% from 23.09% the week before. Leading among individual industries is the convenience and drug retailers sub-group, one of the components of consumer non-cyclicals; they are up 80.40%, versus the previous week's 79.6% cumulative return.

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