Bear Stearns High Yield Index falls 0.22% on week to Oct. 6, return now 1.29% year to date

By Paul A. Harris

St. Louis, Oct. 7 - The Bear Stearns High Yield Index gained 0.22% during the week ended Oct. 6, ending the period with a year-to-date return of 1.29%.

The loss follows the previous week's 0.14% gain.

The Bear Stearns index yield-to-worst spread tightened by four basis points to 382 bps.

The index has now reported gains in 47 of the past 69 weeks. Thus far in 2005 the index has posted 23 positive weekly returns versus 17 negative ones.

With the index having ended the period with a year-to-date return below 1.3%, Prospect News quizzed the Bear Stearns high-yield strategy team as to whether it expected the index to finish 2005 in positive territory.

Victor Consoli, head of corporate credit strategy and high-yield research, responded that single digit positive returns are still achievable for 2005, and 4.0% to 6.0% returns are achievable for 2006.

Only two of the 11 industry sectors ended the week in positive territory.

The outperformer was the utility sector, which gained 0.93% during the week to Oct. 6, leaving its year-to-date return at 1.12%. Utility's independent power producers component led the advance, far outperforming all other sub-sectors in the index to return 1.32% on the week, nudging the component back into the black on a year-to-date basis, up 0.63%

The biggest loss on the week, among the industry sectors, was sustained by the consumer cyclical sector, which dropped 0.47%, increasing its year-to-date loss to negative 0.99%. Among its components, the so-called "other consumer cyclical" sub-sector showed the most dramatic retreat on the week, 1.04%, leaving its year-to-date return at negative 1.49%.

The telecommunications sector ended the week with a year-to-date return of 5.04%, maintaining its lead among all sectors year to date. Telecommunications gave up 0.12% on the week, however.

Telecommunications' cellular component, which ended the period with a 13.78% year-to-date return after having dropped 0.05% on the week, remaining far and away the outperformer among sub-sectors on a year-to-date basis.

The index yield to worst widened by four bps on the week to 8.08%.

The market value of the index decreased during the week to $583.92 billion from the previous week's $590.06 billion. The number of issues increased by eight to 1,777 issues.

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