S&P 500 dividend yield drops below treasury yield

The dividend yield on the S&P 500 Index has dropped below yield on the two-year Treasury note for the first time since 2008.

With the Federal Reserve predicted to raise interest rates at least once this year, the yield on the 10-year note could climb even higher. 

Equity bears believe this could derail the stock market. However, a Bloomberg report says, "for most of history, dividend yields have stayed below two-year Treasury yields, with trailing 12-month dividend yields some 2.58 percentage points below note yields on average since the end of 1977." So, S&P 500 yield falling below treasuries is not necessarily bad news, given that investors invest in stocks for capital appreciation and not for steady income.