Treasurys begin week higher

By Blake Ellis, staff reporter


NEW YORK (CNNMoney.com) -- Treasurys rose Monday as stocks ended lower, the euro sank and fears about the global economic recovery persisted.

What prices are doing: The benchmark 10-year note rose 5/32 to 102-12/32, pushing the yield down to 3.22% from 3.23% on Friday. Bond prices and yields move in opposite directions.

The 30-year bond was the one exception, edging lower by 1/32 to 104-23/32 and yielding 4.1%. The 5-year note added 2/32 to 102-9/32, yielding 2.01%, while the 2-year note gained 1/32 to 100-16/32, yielding 0.75%.

What's moving the market: Treasury prices were lifted Monday as stocks fell and investors remained worried about European debt and its impact on the global economy.

Meanwhile, the euro slipped versus the dollar as investors continued to question the effectiveness of the $1 trillion European rescue package, which was introduced earlier in the month to stabilize the euro and aid debt-choked euro zone members.

"We have already seen the trillion-dollar bazooka, and that's not really turning things around," said Michael Cheah, a bond fund manager at SunAmerica. "This tells us that perhaps the Europe situation is still extremely sick with debt, and that's why there's still a flight to safety."

Treasurys are viewed as low-risk investments since they are backed by the U.S. government, and they are therefore particularly attractive during times of economic uncertainty.

Investors were also bracing for the week's upcoming auctions, which start with a $42 billion offering of 2-year notes on Tuesday. On Wednesday, the Treasury Department will hold a $40 billion auction of 5-year notes.

Separately, a report from the National Association of Realtors on Monday showed that existing home sales jumped 7.6% to a seasonally adjusted annual rate of 5.77 million units in April. Economists surveyed by Briefing.com had expected sales to rise to a 5.65 million unit rate last month.

Lending rates: Bank-to-bank lending rates for three-month loans continued to rise on Monday, helping to boost Treasurys.

The London interbank offered rate, or Libor, ticked up to 0.51% after rising to 0.497% on Friday.

"The Treasury market is looking at Libor and there seems to be fear that European banks are having difficulty getting funding," said Cheah. "The market still feels the European situation isn't under control, so there is fear that European banks are likely to lose money and American banks are reluctant to lend money to them."

Until investors feel confident about a solution for the euro zone's mounting debt, Libor will continue to tick higher, said Cheah.

Libor is a daily average of interest rates that 16 London banks charge each other to lend money, and is used as a benchmark to calculate adjustable-rate mortgages and other loans.

Higher Libor rates indicate less lending among banks, while lower levels signal an increasing willingness to lend. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.98%4.08%
15 yr fixed3.09%3.11%
5/1 ARM3.20%3.22%
30 yr refi4.06%4.16%
15 yr refi3.17%3.20%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,810.06 91.06 0.51%
Nasdaq 4,712.97 11.10 0.24%
S&P 500 2,063.50 10.75 0.52%
Treasuries 2.32 -0.02 -0.86%
Data as of 6:14am ET
Company Price Change % Change
Bank of America Corp... 17.12 0.12 0.71%
Kinder Morgan Inc 39.75 -0.17 -0.43%
Apple Inc 116.47 0.16 0.14%
Intel Corp 35.59 -0.36 -1.00%
Microsoft Corp 47.98 -0.72 -1.48%
Data as of Nov 21

Sections

This arrangement, announced Friday, illustrates how the lines have blurred between traditional TV networks and newfangled options like Netflix. More

The Obama administration is touting that its immigration action will boost wages. But the hike amounts to only $170 a year by 2024. More

Obama doesn't have the authority to create a startup visa, but part of his reform announcement could include a workaround for entrepreneurs: 'parole status.' More

Nearly half of all Americans say there's a chance they'll have to work during a holiday between Thanksgiving and New Year's, according to a new poll. And one in four say they'll have to work whether they want to or not. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.