NEW YORK (CNN/Money) -
Treasury prices moved lower Thursday on news the U.S. economy grew at its fastest rate in nearly two decades, stoking anxiety that interest rates could rise sooner than expected.
At around 4 p.m. ET, the benchmark 10-year note fell 5/16 of a point in price to 99-7/32; its yield rose to 4.35 percent from 4.30 percent late Wednesday. The 30-year bond shed 11/32 of a point to 102-1/2, its yield rising to 5.20 percent from 5.18 percent from late Wednesday. Bond yields and prices move in opposite directions.
Two-year note prices fell 3/32 of a point at 99-17/32 with a yield of 1.86 percent, while the five-year note lost 3/8 of a point to 99-1/4 with a yield of 3.29 percent.
In the currency market, the dollar gained against the yen and the euro. The dollar bought ¥108.72, up from ¥108.26 late Wednesday, while the euro bought $1.1638, down from $1.1670 late Wednesday.
The U.S. economy grew at a stunning 7.2 percent annual rate from July to September, the Commerce Department said, denting the allure of low-risk, low-return government debt.
Separate reports on the job market hinted at the possibility that a broader recovery could be under way. New claims for jobless benefits and an index of help-wanted ads suggested some stability in employment.
All of which deflated bond prices some, though not as much as pessimists had feared. For the most part, financial markets had already anticipated that record amounts of economic stimulus would inevitably translate into a jump in growth.
In addition, traders found comfort in the central bank's renewed promise this week to maintain a loose monetary policy.
"We've just come off the FOMC meeting and it still appears that the Fed is going to keep policy accommodative for a protracted period of time," said Marcello Frustaci, a bond trader at Mizuho Securities in Hoboken, N.J.
That helped ease the pain for bonds, though moves in shorter-dated debt did indicate that investors were betting that a rate hike was now a step nearer.
Treasurys were aided in part by a hesitant performance from equities, with the major indices barely higher despite the amazing growth numbers.
-- Reuters contributed to this story.
|
