Bear Stearns High Yield Index drops 0.73% in week to Aug. 2, sinks year-to-date return to negative 0.46%

By Paul A. Harris

St. Louis, Aug. 3 - The Bear Stearns High Yield Index fell by 0.73% during the week to Aug. 2, sending its year-to-date return beneath the balk line at negative 0.46%.

The yield to worst for the week to Aug. 2 climbed by 26 basis points to 9.20%, while the yield-to-worst spread went 25 bps wider to 454.

Among the high-yield credit classes, the yield-to-worst spread of the highest quality class of bonds, BB (representing 31.4% of the index composite), widened during the most recent week by 11 bps to end at a 327 bps spread to Treasuries at the Aug. 2 close.

Over the same period, the lowest-rated class, C (slightly more than 23% of the composite), widened by 45 bps, ending the week at a spread of 666. That spread increase followed the previous week's 103 bps jump.

At the Aug. 2 close, the majority of the index industry sectors posted year-to-date losses, with seven of the 12 sectors in the red.

The consumer cyclical sector, which encompasses the home builders and building materials sub-sectors, posted the worst year-to-date return at negative 2.06%. Its home builders component, now at negative 10.8% for the year, is the underperformer among all of the sub-sectors in the index.

Running a distant second in the race for the dubious distinction of "underperforming sub-sector" is the consumer cyclical sector's building materials component, now negative 4.41% on the year.

Most resilient among the sectors is the capital goods - manufacturing sector, with a 1.26% year-to-date return.

The year-to-date outperformer among the sub-sectors is the telecommunications sector's ESMR & PCS component, which returned 5.02% to the Aug. 2 close.

On Aug. 2, the index had a market value of $570.28 billion, $9.57 billion lower than the previous week. During the same period, the issue count fell by eight to end at 1,545 issues.

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