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Bonds Prices Slip Friday

October 13, 2000

NEW YORK (AP) _ Bond prices slipped Friday, giving up some of the gains they made the day before when investors fled the turmoil of the stock market for safer investments.

The price of the benchmark 10-year Treasury note fell 3/32 point, or 94 cents per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 5.72 percent compared with 5.71 percent late Thursday.

The 30-year Treasury bond rose 1/16 point to yield 5.80 percent, down from 5.81 percent a day earlier, according to Bridge Telerate news service.

With the stock market rebounding smartly Friday from its dropoff the day before on worries about conflict in the Middle East and the subsequent spike in oil prices, bonds were losing their allure as a temporary safe-haven investment.

The Dow Jones industrial average gained 157.60 points to close at 10,192.18 Friday, making up nearly half of the 379-point selloff on Thursday. The Nasdaq also shot higher, gaining 242.09 points to 3,316.77, one of its best one-day performances of all time.

In other trading, short-term Treasury securities fell 1/16 point, while intermediate maturities fell 3/32 point.

Yields on three-month Treasury bills were 6.18 percent as the discount rose 0.03 percentage point to 6.01 percent. Six-month yields were 6.19 percent, as the discount rose 0.02 percentage point to 5.93 percent. One-year yields were 5.92 percent as the discount rose by 0.02 percentage point from late Thursday to 5.63 percent.

Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.

The federal funds rate, the interest on overnight loans between banks, was unchanged from late Thursday at 6.44 percent.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 1/8 point to 98 13/32 The average yield to maturity fell to 5.81 percent from 5.82 percent.

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