NEW YORK (AP) _ Long-term bond prices fell Thursday after a report showing a rise in industrial production dimmed some optimism that Federal Reserve Board policy-makers won't raise interest rates at their next meeting.

The price of the benchmark 10-year Treasury note fell 1/16 point, or 62 1/2 cents per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 6.04 percent from 6.03 percent late Wednesday.

The 30-year Treasury bond fell 7/32 point, or $2.19 per $1,000 face value, to yield 5.92 percent, up from 5.91 percent a day earlier, according to Bridge Telerate news service.

The Federal Reserve reported Thursday that industrial production at the nation's factories, mines and utilities rose a solid 0.4 percent last month, surprising economists who were predicting output would decline.

The increase spooked some traders who thought the U.S. economy was slowing enough for the Fed to leave interest rates alone at the June 27-28 Open Market Committee meeting.

The Fed, which meets again June 27-28, has raised rates six times in the past year in an effort to stave off a resurgence of inflation.

In other trading, short-term Treasury securities fell 1/32 point while intermediate maturities ranged from losses of 1/32 point to 1/16 point.

Yields on three-month Treasury bills were 5.82 percent as the discount rose 0.03 percentage point from Wednesday to 5.67 percent. Six-month yields were 6.22 percent, as the discount rose 0.02 percentage point to 5.96 percent. One-year yields were 6.11 percent as the discount was unchanged at 5.78 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 6.69 percent from 6.56 percent late Wednesday.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 1/8 to 95 21/32. The average yield to maturity was 5.95 percent, down from 5.96 percent.