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Bond Prices Little Changed

December 29, 1988

NEW YORK (AP) _ Bond prices barely budged Thursday with little news to influence trading.

The Treasury’s bellwether 30-year issue fell 1-32 point, or about 32 cents per $1,000 face amount. Its yield was unchanged at 9.00 percent.

Analysts said prices were supported by strength in the dollar, but concerns about rising interest rates kept bonds in check.

″It was a stalemate on balance,″ said Elliot Platt, research director for Donaldson Lufkin & Jenrette Securities Corp.

Trading was light, he said.

The Treasury’s auction of four-year notes had little effect on the market, Platt said.

In the auction, yields on the four-year bonds rose to their highest level in 14 months. The average yield was 9.22 percent, up from 8.76 percent at the last auction on Sept. 28.

A total of $7.26 billion in notes were sold out of bids totaling $23.03 billion.

In the secondary market for already outstanding Treasury bonds, prices of short-term governments rose between 3-32 point and 1/8 point, intermediate maturities rose between 1/8 point and 7-32 point and 20-year issues were up 1-16 point, according to figures provided by Telerate Inc., a business- information service.

The Shearson Lehman Hutton Daily Treasury Bond Index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, was up 1.14 at 1,131.69.

Corporate bonds moved slightly higher. Moody’s Investment Grade Corporate Bond Index, which measures price movements on 80 corporate bonds with maturities of five years or longer, rose 0.08 to 293.87.

Yields on outstanding three-month Treasury bills dropped to 8.38 percent as the discount plunged 11 basis points to 8.11 percent. Yields on six-month bills fell to 8.67 percent as the discount declined 11 basis points to 8.22 percent. Yields on one-year bills slipped to 9.02 percent as the discount lost 5 basis points at 8.35 percent.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discount is the percentage that bills are selling below the face value, which is paid at maturity.

The federal funds rate, the interest on overnight loans between banks, traded at 9 1/2 percent, unchanged from late Wednesday. The high rate reflects yearend demand for extra capital reserves.

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