Bonds Rise As Stocks Are Turbulent
NEW YORK (AP) _ Bond prices rose Monday as investors sought reassurance in Treasuries.
The price of the benchmark 10-year Treasury note rose 5/32 point, or $1.56 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 5.76 percent compared with 5.78 percent late Friday.
The 30-year Treasury bond rose 15/32 point to yield 5.83 percent, down from 5.87 percent Friday, according to Bridge Telerate news service.
Stocks plunged in early trading Monday, driven by an earnings warning by computer maker Hewlett-Packard Corp., with the Nasdaq composite index falling below 3,000 for the first time since last November and the Dow Jones industrial average dropping 233 points at one point.
Though both indexes recovered from their lows, the stock market jitters boosted the bond market, as did continued uncertainty over the presidential election results.
In other trading, short-term Treasury securities rose 1/32 point, while intermediate maturities rose between 1/4 point and 5/32 point.
Yields on three-month Treasury bills were 6.35 percent as the discount rose 0.01 percentage point to 6.18 percent. Six-month yields were 6.34 percent, as the discount rose 0.01 percentage point to 6.07 percent. One-year yields were 6.13 percent as the discount fell 0.01 percentage point to 5.84 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 6.56 percent from 6.50 percent Friday.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 3/32 to finish at 99 7/32. The average yield to maturity was fell to 5.79 percent from 5.80 percent Friday.