Treasurys rise on downbeat economic reports

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Treasurys edged up Tuesday as stocks fell after downbeat economic reports and investors questioned whether the Federal Reserve will restart a bond-buying program to pump more stimulus into the economy.

What prices are doing: The benchmark 10-year note rose 15/32 to 105, and its yield fell to 2.91%. Bond prices and yields move in opposite directions.

The 30-year bond rose 16/32 to 105-27/32 and its yield slipped to 4.04%. The 2-year note inched up 2/32 with a 0.54% yield, while the 5-year note rose 14/32 to 100-31/32, with a lower 1.55% yield.

10yearyield.png
Click the chart for current prices and yields.

What's moving the market: Disappointing economic news, coupled with a mixed bag of earnings from Dow components Procter & Gamble and Pfizer, set a downward trend for equities in the morning, and boosted the safe-haven appeal of U.S. Treasurys.

Before the bell, stock markets looked downward after the government reported personal income and spending both remained flat during June, whereas economists had been forecasting a slight uptick in spending for the month.

Later in the morning, separate reports showed factory orders and pending home sales both fell.

Meanwhile, bond traders also speculated that when Federal Reserve officials meet next week, the central bank may consider another bond-buying program to stimulate what has recently looked to be a slowing economic recovery.

A front-page article in the Wall Street Journal spurred that speculation, after it said the central bank may consider a strategic shift in the way it manages its massive securities portfolio.

The Fed completed a bond-buying spree in March, after it purchased about $1.7 billion in Treasury debt and mortgage bonds in an effort to drive down long-term interest rates and aid an economic recovery. To top of page

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