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Bonds Fall Despite Stock Weakness

May 6, 2002

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NEW YORK (AP) _ Bond prices fell slightly Monday despite sustained weakness in the stock market.

In what traders described as a fairly quiet session, bonds traded in a narrow range and remained in negative territory throughout the day.

The price of the benchmark 10-year Treasury note fell 3/32 point, or 94 cents per $1,000 in face value. Its yield, which moves in the opposite direction, rose to 5.07 percent compared with 5.05 percent late Friday.

The 30-year Treasury bond fell 2/32 point to yield 5.54 percent, up from 5.53 percent a day earlier, according to Moneyline Telerate.

In other trading, the benchmark 2-year note was unchanged from Friday’s 3.15 percent. Intermediate maturities were down 1/32 to 1/16 points.

Yields on one-month Treasury bills were 1.73 percent as the discount rose .02 percentage point to 1.71 percent. Yields on three-month Treasury bills were 1.76 percent as the discount was unchanged. Six-month yields were 1.87 percent, as the discount rose .01 percentage point to 1.83 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 rose 1/32 point to 104 7/32 point. The average yield to maturity was unchanged at 5.31 percent.

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