NEW YORK (AP) - Stocks edged lower for the first time in five days Wednesday, but the real action was in the bond market.
The yield on the 10-year Treasury note fell to its lowest in 11 months as investors continued to put money into the bond market, extending a rally that has taken many investors and analysts by surprise. Most market participants had expected yields to climb this year, and bond prices to fall, as the Federal Reserve reduced its purchases of bonds and the economy improved.
Instead, the opposite has happened. While stocks have ground out modest gains this year, pushing major indexes to record levels, bond prices have surged. Even evidence that the economy is strengthening after a winter lull has failed to slow the rally.
"The bond market has been incredibly resilient," said Russ Koesterich. "Even as stocks have pushed to new highs, and you've had generally positive economic data, bonds have remained well bid."
The S&P 500 fell 2.13 points, or 0.1 percent, to 1,909.78. The index closed at a record 1,911.11 the day before.
The Dow Jones industrial average dropped 42.32 points, or 0.3 percent, to 16,633.18. The Nasdaq composite fell 11.99 points, or 0.3 percent, to 4,225.07.