Bonds End Their Winning Streak
Jun. 07, 2000
NEW YORK (AP) _ Government bond prices fell slightly Wednesday, with longer maturities ending a five-session winning streak, as pressures from corporate debt sales hurt U.S. Treasury issues.
The price of the benchmark 10-year Treasury note fell 5/32 point, or $1.56 per $1,000 in face value. Its yield rose to 6.14 percent from 6.12 percent late Tuesday.
The 30-year Treasury bond fell 1/32 point, while its yield rose to 5.91 percent from 5.90 percent, according to Bridge Telerate news service.
Bonds fell amid a rash of corporate debt that was priced Wednesday. Those bond sales included a $4.5 billion issue from Ford Motor Credit Co and a $3 billion debt issue from mortgage firm Fannie Mae.
Corporate debt usually pays higher yields than government bonds, and thus reduces the demand for Treasuries.
In other trading Wednesday, short-term Treasury securities were down 1/16 point to 3/32 point, while intermediate maturities were down 3/32 point to 5/32 point.
Yields on three-month Treasury bills were 5.90 percent as the discount fell 0.08 percentage point from Tuesday to 5.74 percent. Six-month yields settled at 6.27 percent with a discount of 6.01 percent, down 0.04 percentage point from Tuesday.
One-year yields were 6.20 percent with a discount of 5.86 percent, down 0.01 percentage point. 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 6.50 percent from 6.44 percent late Tuesday.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 13/32 to 94 7/16. The average yield to maturity was 6.04 percent, down from 6.07 percent.