Bear Stearns High Yield Index yield-to-worst spread at tightest level in six years

St. Louis, Oct. 8 - The Bear Stearns High Yield Index regained its winning ways for the week ending Oct. 7 as the index's yield-to-worst spread tightened 19 basis points to settle at 401.

"That's the tightest we've been in six years," said Bear Stearns & Co. high-yield analyst Mike Taylor. "While Treasuries have been selling off up until Friday, when they rallied because of the payroll figures, high yield was contracting on a spread basis.

"We tightened to just over 400 basis points and it's not just because high yield has held up. There has actually been some price improvement. So we have seen positive total return as well, which has enhanced that spread contraction.

"It means that there are actually better buyers' bidding prices up in most of the sectors this week."

The index posted a 0.37% return for the week, which comes on the heels of the previous week's negative 0.09%.

With 15 of the past 17 weeks in positive figures, the year-to-date-return climbed to 6.39%.

Ten of the 11 industry sectors making up the Bear Stearns index showed positive returns in the latest week.

The biggest gainer among the sectors was transportation, which returned 0.85%. The sector ended the week with a negative 15.60% year-to-date return.

Leading the transportation sector's climb was the airlines sub-sector, with a 1.57% weekly return, leaving it negative 37.77% year to date.

The single losing sector was finance, posting a negative 0.19% return on the week, leaving it with a 5.35% year-to-date return.

Finance's insurance sub-sector posted a negative 0.23 weekly return, leaving it 5.25% in the black for the year.

The top sector year to date remains basic materials at up 9.86%. It posted a 0.22% return on the week.

The strongest year-to-date sub-sector, textiles and apparel at up 23.79%, gained 0.18% on the week.

The index's yield to worst ended the week at 7.47%, seven basis points tighter than the previous week's 7.54%.

The index ended the week to Oct. 7 with a market value that had declined to $523.93 billion from $525.21 billion the previous week. Over the course of the week the number of issues decreased by four, to 1,678 from 1,682.

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