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Bonds Prices Mostly Higher

June 19, 2001

NEW YORK (AP) _ Bond prices primarily moved higher on Tuesday as concerns about corporate earnings left stock markets mostly flat.

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 5.23 percent compared with 5.25 percent late Monday.

The 30-year Treasury bond gained 1/4 point to yield 5.68 percent, down from 5.70 percent Monday, according to Bridge Telerate news service.

Wall Street economists expect the Federal Reserve to cut interest rates by a quarter point at its meeting next week, a sentiment that provided strength to bond markets on a day when stock markets were mixed.

The Dow Jones industrial average closed down 49 points at 10,597 while the Nasdaq composite index rose 4 points to 1,993, halting a seven-session losing streak.

In other trading, short-term Treasury securities traded between 1/32 point lower and 1/32 point higher, while intermediate maturities gained between 1/32 point and 3/32 point.

Yields on three-month Treasury bills were 3.48 percent, as the discount was unchanged at 3.43 percent. Six-month yields were 3.46 percent, as the discount was down to 3.38 percent. One-year yields were 3.37 percent as the discount was steady at 3.28 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, fell to 3.88 percent from 3.94 percent late Monday.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds was at 103 20/32, down 7/32 from Monday. The average yield to maturity rose to 5.37 from 5.35 percent Monday.

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