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Bonds Prices Fall in Stock Selloff

November 27, 2002

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NEW YORK (AP) _ Bonds fell sharply in a shortened session Wednesday, as investors rushed to buy stocks following a spate of positive economic data.

The price of the benchmark 10-year Treasury note fell 1 9/16 point to yield 4.26 percent, up from 4.07 percent Tuesday.

The 30-year Treasury bond dropped 2 11/16 to yield 5.11 percent from 4.94 percent Tuesday, according to Moneyline Telerate.

The bond markets closed at 2 p.m. Wednesday in advance of the Thanksgiving holiday. Stocks had a full-day session, and the Dow Jones industrials closed up 255.26 at 8,931.68, after encouraging data showing growth in consumer spending and durable-goods orders.

The broader market was also higher. The Nasdaq soared 43.51 to 1,487.94. The Standard & Poor’s 500 index advanced 25.56, or 2.8 percent, to 938.87.

In other bond trading, the price of the benchmark 2-year note dropped 9/32 while its yield rose to 2.08 percent from 1.94 percent Tuesday. Intermediate maturities fell between 29/32 and 1 17/32.

Yields on one-month Treasury bills were 1.27 percent as the discount rose 0.04 percentage points to 1.24 percent. Yields on three-month Treasury bills were 1.23 percent as the discount rose 0.05 percentage point to 1.21 percent. Six-month yields were 1.31 percent, as the discount rose 0.03 percentage point to 1.28 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 steady at 1.31 percent.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds fell to 106 19/32 from 107 7/32 Tuesday. The average yield to maturity was 5.17 percent, up from 5.11 percent the day before.

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