10-year Treasury yield below 3%

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- Treasury prices continued to surge Tuesday, pushing the 2-year note's yield to a record low and the 10-year note's yield below 3% for the first time since April 2009, as the looming expiration of Europe's bank lending program boosted demand for the safety of government debt.

What prices are doing: The benchmark 10-year note jumped 19/32 to 104-21/32 and its yield sank to 2.96% from 3.03% on Monday. Bond prices and yields move in opposite directions.

file.png

The 30-year bond climbed 1-10/32 to 107-26/32 with a yield of 3.93%. The 2-year note gained 2/32 to 100-2/32 and its yield was 0.61%. Earlier, the 2-year note's yield fell to 0.59%, a record low.

What's moving the market: The European Central Bank's year-long lending program to boost liquidity expires Thursday. As banks in the euro zone gear up to pay back €442 billion, investors are nervous that end of the program could further rock the financial system.

The mounting fears are pressuring the euro and world markets, and increasing the appeal of safe-haven assets including Treasurys.

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

What analysts are saying: "Treasury rates this low typically signal a real slowdown in economic activity, or even a recession," said Peter Cardillo, chief market strategist at Avalon Partners. "But I think this is a heightened fear factor and a flight to quality as opposed to any real economic meltdown."

He added that investors are concerned that when banks pay back the loans, the market will face another credit crunch.

"The market is now set for a major reversal that could happen at any time," he said. "But if this grossly exaggerated fear factor continues, yields could go lower."  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 fixed3.99%4.00%
15 yr fixed3.06%3.10%
5/1 ARM3.20%3.19%
30 yr refi3.99%4.08%
15 yr refi3.07%3.18%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,827.75 12.81 0.07%
Nasdaq 4,787.32 29.07 0.61%
S&P 500 2,072.83 5.80 0.28%
Treasuries 2.23 -0.03 -1.15%
Data as of 6:09am ET
Company Price Change % Change
Kinder Morgan Inc 42.32 0.00 0.00%
Apple Inc 119.00 0.00 0.00%
Pfizer Inc 31.10 0.00 0.00%
Bank of America Corp... 17.11 0.00 0.00%
Microsoft Corp 47.75 0.00 0.00%
Data as of Nov 26

Sections

The European Parliament has voted to break up Google and weaken its dominance across the region. More

Two pilots encountered drones while flying over college football games and another pilot saw one while flying over the Hollywood sign. More

Natalie's Cakes and More has raised $84,000 through GoFundMe after protests trash store. More

Retailers are promising big deals this Black Friday, but are the savings actually worth the shopping mayhem? Test your deal-sniffing skills. 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.