News Column

US investors look for safety

August 11, 2014

INVESTORS once again are snapping up high-dividendpaying US stocks as Treasury yields fall, which should keep utilities and telecom stocks near the top of the buying list for the near future.

The S&P 500 utility sector, whose dividend yield at 3.9 per cent is more than 100 basis points above the 10-year Treasury yield, led the S&P 500's advance on Friday after concern about the launch of US air strikes on Iraq drove the benchmark bond yield to 14-month lows.

The equity market recovered from early losses, partly due to news Russia'sDefence Ministry said military exercises near the Ukraine border had ended.

Meanwhile overseas turmoil has driven up demand for safe-haven bonds, also supported by the Federal Reserve's continued purchase of Treasuries while it pares back bond buying.

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Source: City A.M. (UK)

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