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Bonds Rise As Stocks Lose Ground

November 18, 2003

NEW YORK (AP) _ Bonds prices rose on Tuesday, as investors sold off stocks for a fourth straight session.

The price of the benchmark 10-year Treasury note rose 7/16 point, or $4.38 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 4.14 percent compared with Monday’s level of 4.20 percent.

The 30-year Treasury bond added 13/16 point to yield 5.00 percent, down from 5.05 percent a day earlier, according to Moneyline Telerate.

The increase in bonds came as traders eyed a report from the Labor Department showing that consumer prices were flat in October, easing after rises in the previous two months.

On Wall Street, stocks continued their recent decline, a four-day sell-off that has come despite relatively good corporate news.

The Dow Jones industrial average closed down 87 at 9,624. The Nasdaq composite index ended the day down 28 at 1,882. The Standard & Poor’s 500 index lost 9 to close at 1,034.

In other trading, the benchmark 2-year note rose 1/32 point to yield 1.77 percent. Intermediate maturities rose between 3/32 point and 7/32 point.

Yields on one-month Treasury bills were 0.93 percent as the discount rate was unchanged at 0.91 percent. Three-month yields were also unchanged at 0.95 percent with the discount at 0.93 percent. Six-month yields were 1.03 percent as the discount rose 0.01 percentage points to 1.01 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 1 percent from 1.06 percent on Monday.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds was unchanged at 111 11/32. The average yield to maturity was also unchanged, at 4.95 percent.

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