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Bond Prices Fall Amid Stock Rally

August 8, 2002

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NEW YORK (AP) _ Bond prices fell Wednesday, pressured by a stock rally on Wall Street.

The price of the benchmark 10-year Treasury note declined 11/32 point, or $3.44 per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 4.40 percent compared with 4.30 percent late Wednesday.

The 30-year Treasury bond fell 1/8 point to yield 5.22 percent, unchanged from Wednesday, according to Moneyline Telerate.

On Wall Street, the Dow Jones industrial closed up 256, or 3 percent, at 8,712. The Standard & Poor’s 500 index rose 29, or 3.3 percent, to 905. The Nasdaq composite index advanced 36, or 2.8 percent, to 1,317.

In other trading, the benchmark 2-year note dropped 7/32 point to yield 2.09 percent, up from 1.98 percent. Intermediate maturities fell in the range of 3/8 point.

Yields on one-month Treasury bills were 1.67 percent as the discount remained steady at 1.64 percent. Yields on three-month Treasury bills were 1.61 percent as the discount rose 0.025 percentage point to 1.58 percent. Six-month yields were 1.58 percent, as the discount rose 0.035 percentage point to 1.55 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, was unchanged at 1.75 percent.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds fell to 106 9/16 from 106 23/32. The average yield to maturity was steady at 5.17 percent.

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