Bear Stearns High Yield Index gains 1.27% in February

New York, March 4 - The Bear Stearns High Yield Index gained 1.27% in February thanks to a late-month rally.

The market had been down 1% at the middle of February but rebounded in the second half to bring the returns so far in 2003 to 4.68%, according to a report by Bear Stearns & Co. high yield analyst Michael Taylor.

Technology was the best performer of the 11 industry sectors making up the index, rising 3.43% during the month and is also in first place year to date with a 15.31% total return.

Transportation is by far the biggest loser, falling 6.74% in February and down 9.68% so far in 2003.

Among narrow sub-sectors, the cellular component of telecommunications showed the biggest rise, up 5.85% in the month and 15.06% stronger for 2003 to date. (Bear Stearns does not sub-divided technology.)

The largest decline was in transportation's airlines sub-division, which fell 10.53% and is down 15.16% so far this year.

Overall nine of the 11 broad industry sectors making up the index showed positive returns.

Bear Stearns also noted that CCC rated issues outperformed the broader high-yield market, rising 1.90%, and distressed did even better with a 2.50% gain.

High yield continues to beat other asset classes, Bear Stearns' Taylor noted. Compared to junk's 4.68% gain, the Lehman Brothers corporate aggregate index is up 2.33%, the Lehman Brothers mortgage index is 0.91% higher, the Ryan 10-year Treasury index is 1.80% better and the S&P 500 is down 4.08%.

During the month fallen angels added $7.9 billion to the index including Abitibi with $3 billion, Ahold Finance USA with $1.7 billion, Bowater with $1.2 billion, Shaw Communications with $965 million and East Coast Power with $429 million.

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