Dow rises as Treasury unveils plan to relieve bond market pressure

The Dow Jones Industrial Average rose on Wednesday as bond yields fell following the Treasury Department’s announcement of an increased buyback operation for longer-term debt.

The 30-stock Dow added 195 points, or 0.4%. The S&P 500 traded up 0.6%, while the Nasdaq Composite gained 0.6%.

Yields on the long end of the Treasury curve sank after the Treasury Department said it’s going to at least double the size of its government debt repurchases. The increased buyback is aimed at the 10- to 30-year parts of the market. That’ll include the 20-year.

The 30-year Treasury bond yield — which notched a new 19-year high of above 5.33% in the prior trading day — declined more than 9 basis points to 5.187%. The 10-year Treasury note yield shed more than 6 basis points to 4.645%.

Stocks viewed as beneficiaries of lower rates saw some gains. Lowe’s and Home Depot advanced more than 2% and more than 1%, respectively. McDonald’s was about 1% higher.

“Value names, for example, are doing really well today, and that tells you that the economy and the corporate earnings cycle are still very strong,” said Massimo Santicchia, head of U.S. equities at Procyon. That said, there’s “a tension now in the market,” he added, noting that there are solid fundamentals on one hand and a higher cost of capital induced by higher yields on the other.