Bear Stearns High Yield Index ends week flat, year-to-date return holds at 6.84%

By Paul A. Harris

St. Louis, Oct. 22 - The Bear Stearns High Yield Index ended the week to Oct. 21 flat. It follows a 0.42% return for the week ended Oct. 15.

With 16 of the past 19 weeks in positive figures, the year-to-date return held at 6.84%.

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

Bear Stearns & Co. high-yield analyst Mike Taylor told Prospect News on Friday that although the week ended flat, the market had begun to rally toward the end of the seven-day period, owing to credit-specific news.

"The news of Qwest's settlement with the FCC was helpful," Taylor said. "Qwest is the largest issuer in this index, at $13.7 billion of debt on a par basis. So it's about 2.7% of the market weight of the index. So that has a material impact on the overall average performance."

The biggest gainer among the sectors was technology, which returned 0.36%. The sector ended the week with a 5.91% year-to-date return.

The sector posting the biggest loss was transportation, returning a negative 3.46% return on the week, leaving its return a negative 15.37% year to date.

Leading the loss in that sector was the airlines sub-sector which posted a negative 9.93% weekly return, leaving it negative 38.57% on the year.

The Bear Stearns High Yield Index's top sector year to date remains basic materials at up 10.39%. However, it posted a negative 0.02% return on the week.

The strongest year-to-date sub-sector remains textiles and apparel at 23.06%. However that sub-sector posted a negative 1.26% for the most recent week.

The index's yield to worst ended the week at 7.42%, four basis points wider than the previous week's 7.38%. The yield-to-worst spread was 417 basis points, two basis points wider on the week.

The index ended the week to Oct. 21 with a market value that had slipped slightly to $531.59 billion from $532.84 billion the previous week. Over the course of the week the number of issues increased by three to 1,699 from 1,696.

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