Treasurys rise as stocks slump

By Blake Ellis, staff reporter


NEW YORK (CNNMoney.com) -- Treasury prices rose Monday in choppy trading as stocks plummeted and investors braced for $70 billion in debt sales.

What prices are doing: The benchmark 10-year note added 16/32 to 103, pushing the yield down to 3.15% on Thursday from 3.21% on Friday. Bond prices and yields move in opposite directions.

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The 30-year bond climbed 29/32 to 105-3/32, yielding 4.08%. The 5-year note rose 8/32 to 100-29/32 and yielded 1.9%, while the 2-year note edged up less than 1/32 to 100-2/32, yielding 0.73%.

What's moving the market: Treasurys seesawed Monday, ending with gains as stocks fell to 7-month lows and the euro plunged to a fresh four-year low against the dollar.

U.S. government-backed Treasurys are viewed as low-risk investments and are attractive during times of economic uncertainty.

On Friday, Treasurys rallied as investors were cautious going into the weekend, after a disappointing report on employment revived worries about the health of the global economy.

Auctions on tap: The government will sell a total of $70 billion in bonds and notes during the week, with the first $36 billion auction of 3-year notes scheduled for Tuesday.

On Wednesday, the Treasury Department will offer $21 billion in 10-year notes. A $13 billion auction of 30-year bonds will be held Thursday.

"This week's battle will be how well the auctions go, since Treasurys are pretty rich at these levels," said Rupert. "If there's a big flight to safety, the auctions will go quite well, but if not, they'll still go decently, it's just a question of at what price."

Rupert said that despite the outcome of this week's auctions, demand for Treasurys is likely to stay strong as uncertainty about euro zone debt issues remains.

"There are still the same old problems, like euro zone sovereign debt worries, concerns over the recovery and the market didn't take last week's employment report very well," she said. "These kinds of jitters will keep a bid in Treasurys." To top of page

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