Bear Stearns High Yield Index drops 0.76% for week to May 12, year-to-date losses now negative 2.87%

By Paul A. Harris

St. Louis, May 13 - The Bear Stearns High Yield Index (BSIX) dropped slightly more than three-quarters of a percentage point during the week to May 12, increasing its year-to-date loss to negative 2.87%.

The loss follows the previous week's negative 0.37% return. The index has now reported gains in 33 of the past 48 weeks.

Thus far into 2005 the number of negative-returning weeks is greater than the number of positive-returning weeks, with 10 negative to nine positive.

The index's yield to worst increased by 21 basis points to 8.46% during the week to May 12, while the yield to worst spread widened by 12 bps to end at 455 bps.

All 11 of the industry sectors that comprise the BSIX ended in negative territory for the week.

The transportation sector sustained the greatest amount of damage, dropping 2.33% on the week and leaving it at a negative 13.79% for the year to date. It was the weakest performance of all the sectors thus far into 2005.

Its airlines component led the retreat, losing 8.31%, which was the biggest loss on the week among all the sub-sectors. The airlines component ended the period with year-to-date losses amounting to negative 35.84%, rendering it far and away the most underperforming sub-sector in the BSIX thus far into 2005.

The airlines sub-sector's closest rival for that dubious distinction is the consumer cyclical sector's manufacturing related component, which ended the period with a negative 13.58% year-to-date return. It dropped 2.32% during the week.

Also sustaining notable damage during the week to May 12 was the utility sector, which gave up 1.56%. Its year-to-date losses now amount to a negative 5.98%.

That voltage drain can be traced to its independent power producers component, which dropped 1.85% on the week to end at negative 7.03% year to date.

The week's outperformer, by virtue of its having sustained the least amount of loss, was the finance sector, which dropped 0.11% on the week to May 12, ending the period with a negative 0.07% year-to-date return. That makes it the outperformer of all of the BSIX sectors thus far into 2005.

Notably two of its components registered positive returns on the week: Banking with a 0.13% gain, leaving it up 2.66% year to date, and insurance, which was up 0.71% on the week and trimmed its year-to-date loss to a negative 0.11%.

All 11 of the industry sectors ended the week with negative year-to-date returns.

The cellular component of the telecommunications sector continues to be the BSIX's outperformer, up 3.97% year to date. It dropped 0.58%, however, during the week to May 12.

The index ended the week with a market value of $530.16 billion compared to the previous week's $536.33 billion. The number of issues decreased by 10 to 1,752 issues.

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