Bonds Mixed As Tech Stocks Surge
NEW YORK (AP) _ Most government bond prices rose Thursday as investors sought the safety of Treasury securities amid another day of losses for blue-chip stocks.
The benchmark long-term bond slipped late in the session, however, and ended down for the day.
The price of the 30-year Treasury bond fell 5/32 point, or $1.56 per $1,000 in face value. The yield, which moves in the opposite direction of price, rose to 6.13 from 6.12 late Wednesday.
Analysts said the long-term bond fell victim to another rally in technology stocks. Some investors apparently decided belatedly to jump on the tech bandwagon. So they took money out of government bonds and moved it into riskier technology stocks.
The technology-focussed Nasdaq stock market climbed 67.32 to 4,617.65, another record. Old line industrial stocks tumbled again, however, with the Dow Jones industrial average slipping 133.10 to 10,092.63. Earlier in the day, the Dow briefly dropping below 10,000 for the first time in more than four months.
Also hurting Treasurys was competition from a bevy of higher-yielding corporate bonds that are being offered this week.
Elsewhere in the bond market, prices of short-term Treasury securities rose 1/8 point to 5/32 point and intermediate maturities rose by 9/32 point to 13/32 point, according to Bridge Telerate.
Yields on three-month Treasury bills were 5.80 percent, with the discount down 0.01 percentage point to 5.63 percent from Wednesday’s 5.64 percent. Six-month yields were 6.00 percent as the discount was down 0.01 percentage point to 5.74 percent. One-year yields were 6.18 percent, with the discount falling 0.05 percentage point from late Wednesday to 5.83 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, rose to 5.75 from 5.68 3/4 on Wednesday.
The Bond Buyer index of municipal bonds rose 1/4 to 92 11/16. The yield to maturity of the index fell to 6.17 percent from Wednesday’s 6.19 percent.