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Bond bulks up as stocks lag
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December 9, 1998: 4:03 p.m. ET
Treasurys coast higher again despite weak dollar as Wall St. remains key bond focus
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NEW YORK (CNNfn) - Bond prices continued to power up Wednesday, tipping yields down to near two-month lows as stock markets dipped and commodity prices stayed under pressure.
At around 3 p.m. ET, the 30-year Treasury issue was up 11/32 in price at 104-8/32 while the yield, which moves inversely, dropped to 4.97 percent.
That was the lowest yields have been at the close of U.S. bond futures market trading since Oct. 16.
Analysts said that global economic weakness and a poor showing among stocks and commodity prices helped to rally bonds.
"Stocks are going down, and possibly at the end of the year investors may have decided to cash in chips made in equities and put their money into bonds," said Jon Lonski, a senior economist at Moody's Investor Service.
"The bond market's best friend right now might be the steep valuation" of stocks, added Lonski.
Late Wednesday, the Dow Jones industrial average was down 26.77 points to 9,001.21.
A backdrop of global economic malaise is enough to offset U.S. strength and help ward off any inflation threats, Lonski added. Recent dips in commodity prices such as crude oil put an extra brake on possible price rises.
Late Wednesday, the CRB-Bridge futures index, which tracks a basket of commodities, was down 0.98 at 191.40, a new 20-year low. That is a key sign inflation is at bay.
The bond plodded higher despite signs of economic strength in the Federal Reserve's Beige Book report released in the afternoon. Growth continued in the 12 regions surveyed, even though exports were lagging.
That may mean Fed interest rate policy will hold steady when its policy making committee meets next on Dec. 22.
"I don't think it increases the chances," said Anthony Crescenzi, a bond analyst with Miller Tabak Hirsch.
The dollar was softer against the Japanese yen, unable to climb back from overnight losses after reports U.S. officials may want to see the dollar float between 110 and 120 yen.
The dollar was down 1.33 yen from Tuesday's close at 117.78 yen.
The German mark was lower against the greenback, with the dollar fetching 1.6682 marks. 
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