Bonds Barely Changed
NEW YORK (AP) _ Bond prices were barely changed Monday as a decline in the dollar and gains in stocks took away some of the appeal of Treasury securities.
The price of the new benchmark 30-year Treasury bond rose 1-16 point, or 63 cents per $1,000 invested. Its yield held at late Friday’s rate of 5.54 percent _ an all-time low.
The dollar lost ground against the mark despite a devaluation of the ruble by Russia. Traders speculated the devaluation won’t have a significant effect on that country’s major banking partner, Germany.
The dollar also fell against the yen as Eisuke Sakakibara, the Japanese vice finance minister, suggested that his country was close to intervening in foreign exchange markets to support its currency.
A weaker dollar is discouraging to foreign buyers because it reduces the value of assets, such as U.S. government-backed securities, that are linked to the currency.
A rise in stocks also took away the safe-haven appeal of bonds, which had been boosted recently by turbulence in equity markets. The Dow Jones industrial average reversed rose 149.85 to 8,574.85 Monday.
In the broader market, prices of short-term Treasury securities were up 1-32 point to 3-32 point, and intermediate maturities ranged from up 1-32 point to 3-32 point, reported Bridge Telerate, a financial information service.
The Lehman Brothers Daily Treasury Bond Index, reflecting price movements on bonds with maturities of a year or longer, rose to 1,294.99 from 1,294.61.
Yields on three-month Treasury bills were 5.04 percent as the discount rose 0.03 percentage point to 4.92 percent. Six-month yields were 5.16 percent as the discount rose 0.05 percentage point to 4.97 percent. One-year yields were 5.21 percent as the discount rose 0.01 point to 4.97 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, hale at late Friday’s rate of 5.56 percent.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 1-32 point to 124 7-16. The average yield to maturity fell to 5.19 percent from 5.20 percent.