Yields

"If this yo-yo stock market makes you yearn for peace of mind, reconsider - or consider for the first time - certificates of deposit," says Kiplinger's Magazine in an article titled, "Dusting Off an Old Friend." Some excerpts: "In place of humdrum CDs of yore, you'll find dozens of choices that offer high, inflation-adjusted returns. The yields are nothing to sneeze at." "With inflation at 3 percent, 6- to 7-percent-plus yields from CDs offer government-insured, risk-free, inflation-beating returns."

LOS ANGELES -- For investors already hammered by low returns, last week's interest rate cut could hardly have come at a worse time.While there are no easy answers to the interest income dilemma, financial advisers point to several ways of earning higher yields, especially in fixed-income mutual funds and the bond market.These investments have their down sides and might require a leap of faith for the cautious investor.But for those investors whose returns barely keep pace with inflation, a little risk may be a reasonable alternative.

WITH DIVIDENDS on the S&P 500-stock index now yielding only 2.06 percent -- by far the lowest ever -- should you buy higher-yielding public utility stocks for income?Their record is not impressive. The past 12 months show the Dow Jones utility index up only 8.31 percent, while the Dow industrials are ahead 27.04 percent.The main reason for utilities' under-performance reflects apprehension over industry restructuring and deregulation, and worries about higher interest rates.In 1994, for example, when rates moved sharply higher, utilities suffered a 20 percent decline.

NEW YORK -- A rise in Treasury bond yields triggered a late burst of computer-driven sell orders yesterday that wiped out most of the gains in the stock market.The Dow Jones industrial average rose 6.75 points, to 3,298.95, nearly 22 points below the day's high of 3,320.02. The Standard & Poor's 500 index fell 0.06, to 439.95. The NASDAQ index of smaller stocks advanced 0.21, to a record high of 707.16. The American Stock Exchange Market Value index rose 2.07, to 411.59.Advancing stocks outnumbered declining issues by a margin of 9-to-7 on the New York Stock Exchange.

Because ultrashort-term bond funds occupy a niche squarely between money-market funds and short-term bond funds, you might think they are fairly simple investments.Not so.Some ultrashort funds own only Treasury securities; some own junk bonds, too. Ultrashort usually means less than a year, but it can mean several years. Some invest abroad; others stick to the United States. Some pay dividends; others don't.While nearly all the share prices of the 15 ultrashort funds fell last year, their high incomes propped up their total returns.

If the slide in interest rates still has you wondering where t go for higher yields, and you find "junk bond" funds unsuitable, you may want to take a look at world income funds.Such funds, which invest solely or primarily in higher-yielding foreign government bonds, involve the same risks that domestic bond funds do. There's a credit risk: the risk that issuers of the bonds won't pay interest or principal on time. And there's a market risk: the risk that the bonds' prices will fall when interest rates rise.

With money-market-fund yields falling every week since December in reflection of the Federal Reserve's easier money policy, you may wonder whether the shrinkage of your dividend income could be abated if you switched to a bond fund that offers a higher yield.Such a move could turn out to be the right thing to do. Before you make it, however, you need to bear in mind the risks involved.Bond funds expose you primarily to two major risks: credit risk, the probability that issuers of bonds owned by the funds won't be able to pay interest or repay principal; and market risk, the probability that bond prices will fall when interest rates rise.

NEW YORK -- U.S. stocks rose yesterday as reports of tame inflation drove bond yields lower, helping interest-rate-sensitive bank shares gain. Computer and semiconductor issues furthered the advance.Stocks were buoyed by a report indicating that wages are not rising rapidly enough to drive prices of goods and services higher. Coupled with evidence that the housing market is not heating up and that retail sales are rising modestly, the report prompted investors to reassess expectations for higher interest rates.

Drought has been the bane of many a farmer, but the state's driest summer in 70 years was not as damaging as the global grain market is shaping up to be.Maryland grain farmers managed to come up with a respectable yield from soybeans -- the state's biggest cash crop -- in spite of the drought. The yields are lower than average, but farmers had feared it would be much worse, said Phillip "Chip" Councell, president of the Maryland Grain Producers Association and a Talbot County farmer.The market is exacerbating the impact of lower yields, however.

NEW YORK -- Stocks surged to new highs yesterday as investors large and small braved the market's risks in search of returns no longer available from bank accounts and bonds.The Dow Jones industrial average rose 64.84 points, or 1.9 percent, to a new high of 3,469.42, more than 28 points above its previous record close.It was the largest daily gain since September for the Dow, and several other indexes also set new highs. The Standard & Poor's index scored its best daily gain since the end of 1991.