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Bond Prices Rise in Quiet Trading

December 3, 2001

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NEW YORK (AP) _ Bond prices rose in a quiet trading session Monday, bolstered by falling stock prices.

The price of the benchmark 10-year Treasury note rose 13/32 point, or $4.06 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 4.70 percent from 4.76 percent Friday.

The 30-year Treasury bond climbed 9/16 point to yield 5.25 percent, down from 5.29 percent Friday, according to Moneyline Telerate.

Worries about escalating violence in the Middle East, as well as repercussions from Enron Corp.’s massive bankruptcy, pushed investors toward the less-risky securities and away from stocks.

The Dow Jones industrial average closed down 88 points, or 0.9 percent, at 9,764. The Nasdaq composite index slipped 26 to 1,905 and the Standard & Poor’s 500 index declined 10 to 1,130.

In other trading, the benchmark 2-year note rose 3/32 point to yield 2.79 percent, down from 2.84 percent on Friday. Intermediate maturities rose 9/32 point.

Yields on one-month Treasury bills were 1.84 percent as the discount fell 0.01 percentage point to 1.82 percent.

Yields on three-month Treasury bills were 1.77 percent as the discount rose 0.01 percentage point to 1.75 percent. Six-month yields were 1.79 percent, as the discount rose 0.02 percentage point to 1.76 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, remained steady at 2.13 percent.

In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose to 105 1/2, up from 105 7/16 on Friday. The average yield to maturity fell to 5.26 percent from 5.30 percent Friday.

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