Treasuries gain while S&P 500 fluctuates before Bernanke speech

Treasuries rose, sending 10-year yields to a two-week low, while U.S. stocks fluctuated as consumer confidence slid and investors awaited Federal Reserve Chairman Ben S. Bernanke’s speech on the economy in three days.

Ten-year Treasury note yields lost two basis points to 1.63 percent at 3:25 p.m. in New York. The Standard & Poor’s 500 Index added less than 0.1 percent after falling as much as 0.3 percent, while the Stoxx Europe 600 Index declined 0.7 percent. Copper, zinc and nickel fell at least 0.4 percent. Oil advanced while gasoline retreated after yesterday’s rally as Hurricane Isaac approached the U.S. Gulf Coast. Spanish and Italian 10- year yields climbed at least nine basis points.

American consumer confidence fell by the most in 10 months as households grew more pessimistic, while a reduced economic assessment from Japan highlighted risks of a further global slowdown. U.S. gross domestic product data tomorrow may show faster growth in the second quarter before Bernanke’s speech on Aug. 31 at an annual meeting of central bankers in Wyoming.

“This week is truly the calm before the storm,” Tim Hoyle, director of research at Radnor, Pennsylvania-based Haverford Trust Co., which manages $6 billion, said in a phone interview. “The market could be easily disappointed. It’s hard to tell how much the market’s move is based on the belief that Bernanke is going to come out with a huge announcement.”

Thirty-year U.S. bonds also increased today, sending yields down two basis points to 2.75 percent. Treasuries have fallen 0.6 percent in August, trimming a loss of as much as 1.6 percent earlier in the month, Bank of America Merrill Lynch data showed.

Treasury Auction

Treasuries remained higher after a U.S. auction of $35 billion in two-year notes attracted stronger-than-average demand. The notes drew a yield of 0.273 percent, compared with 0.275 percent in pre-auction trading. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 3.94, versus an average of 3.75 at the past 10 sales.

The S&P 500 last week climbed to its highest level on an intraday basis in more than four years, then failed to close at that milestone. The index has fluctuated near the 1,400 level for three weeks as trading slowed toward the end of the U.S. summer and investors awaited the Jackson Hole gathering to gauge prospects for a possible third round of so-called quantitative easing through asset purchases.

Volume for exchange-listed stocks in the U.S. was less than 4.5 billion shares yesterday, the lowest level since at least 2008 excluding days surrounding holidays, data compiled by Bloomberg show.

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