September 11, 2013 / 7:32 PM / 5 years ago

GLOBAL MARKETS-U.S. firm in record bond sale, stocks rise

* Verizon sells $49 billion in bonds
    * Treasuries supported by Verizon deal as hedges lifted
    * U.S. dollar falls near two-week low on Fed

    By Ellen Freilich
    NEW YORK, Sept 11 (Reuters) - Fixed-income investors gobbled
up $49 billion in notes sold by Verizon on Wednesday, the
largest-ever corporate bond sale in history, while global stocks
rose as Syria tensions eased and the dollar fell near a two-week
    Verizon Communications Inc's $49 billion bond deal
drew a total of $101 billion in orders from pension funds,
endowments, institutional buyers and wealth managers hungry for
higher-yielding securities. 
    Many corporations and countries are rushing to sell debt as
they expect long-term interest rates to rise when the U.S.
Federal Reserve reduces its stimulus in coming months. The Fed
will hold a policy meeting next week. 
    Verizon sold the bonds to partly finance its $130 billion
buyout of its wireless operations, Verizon Wireless, from
    "Despite the specter of higher Treasury rates going forward,
investor demand remains for attractively priced corporate credit
deals," said Bonnie Baha, who heads Global Developed Credit at
    As underwriters of the Verizon deal lifted hedges they had
put on to offset exposure to the Verizon offering, that
supported Treasuries prices.
    So did the Treasury's well-bid auction of re-opened 10-year
    "Historically, reopenings have seen stronger demand than
refundings, a trend that proved relevant today," said William
O'Donnell, head Treasury strategist at RBS Securities in
Stamford, Connecticut. "The auction was on the stronger side."
    Benchmark 10-year notes, up 3/32 in earlier
trade, were up 14/32 after the auction. The yields eased to 2.92
percent from 2.97 percent on Tuesday and a two-year high of 3.01
percent on Friday.
    Jitters over Syria have not been eliminated, but major U.S
stock indexes still advanced. Obama voiced skepticism about
Russia's plan to take control of Syria's chemical arsenal.
    "That is going to cause a little bit of angst, it won't
cause the market to implode. The only reason that would happen
is if these diplomatic efforts fail once again and the prospect
of a real strike looms large again," said Ken Polcari, director
of the NYSE floor division at O'Neil Securities in New York.
    On Wall Street, Apple Inc's shares were down about
5.1 percent a day after it unveiled a high-end iPhone with a
fingerprint scanner as well as a cheaper model targeted at
emerging markets.
    That hurt the Nasdaq Composite, which dropped 5.695
points or 0.15 percent, to 3,723.326. But the Dow Jones
industrial average, aided in part by a rise in IBM
shares, rose 104.79 points or 0.69 percent, to 15,295.85. The
S&P 500 gained 3.1 points or 0.18 percent, to 1,687.09.
    Globally, MSCI's 45-country world index rose
0.38 percent.
    Oil recovered some ground with Brent crude at
$111.51, above a 2 1/2-week trough of $110.59. The steadier
performance came after a 4 percent drop in the past two
sessions, its largest two-day fall since June.
    Gold edged up to $1,363.16 an ounce, above a
three-week low of $1,356.85.
    In Europe, Britain's unemployment rate dipped to its lowest
level since late 2012 in the latest sign its economy is picking
    Sterling rose to a seven-month high against both the dollar
 and the euro.  The FTSEurofirst 300 
pan-European share index rose 0.32 percent.
    Benchmark German government bonds tracked
minor gains by U.S. Treasuries.
    Italy's benchmark yields rose above Spain's for the first
time in 18 months amid concern about political instability and
about Italy's banks before an examination of all euro zone banks
by the European Central Bank in coming months. 
    The Federal Reserve's policy meeting on Sept. 17-18 kept
trading in check, with currency and the U.S. government debt
markets keenly awaiting whether the Fed will begin to reduce its
bond-buying program.
    The dollar fell near two-week lows against major currencies
as some traders pared bets on a reduction in stimulus by the Fed
next week.
    The yen rebounded against the dollar, though remained close
to a seven-week low struck earlier.
    The euro rose 0.35 percent to $1.3313. The dollar
fell 0.44 percent to 99.95 yen.
    The dollar index, a measure of the greenback versus six
major currencies, slipped 0.4 percent to 81.501, the
weakest since Aug. 29.
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