Treasurys rise on economic jitters

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Treasurys rose Wednesday as investors flocked to the security of U.S. debt amid concerns about a global economic slowdown.

What prices are doing: The benchmark 10-year note rose 2/32 to 99-9/32 late Wednesday after rallying earlier, and its yield fell to 2.62% from 2.77% on Tuesday. Bond prices and yields move in opposite directions.

The 30-year bond jumped 5/32 to 108-3/32 with a yield of 3.91%.

The 2-year note gained less than 1/32 to 100-7/32 and yielded 0.52%, while the 5-year note added 1/32 to 101-18/32 with a yield of 1.43%.

What's moving the market: Prices were supported by government figures that showed the U.S. trade gap widened, and data on the Chinese economy further raised worries about the global recovery.

The advance came one day after the Federal Reserve said the economic recovery has weakened, and announced plans to reinvest in the Treasury market.

Meanwhile, investors submitted bids totaling nearly $73 billion in response to the government's sale of $24 billion worth of 10-year notes.

The median yield at Wednesday's auction was 2.67%, marking the third lowest on record, according to Kim Rupert, a fixed income analyst at Action Economics.

"The auction was quite good," she said. "Demand continues to be outstanding."

It was the second of three offerings of U.S. debt this week. On Tuesday the government received strong demand for its sale of $34 billion worth of 3-year notes, but the market still has yet to digest $16 billion worth of 30-year bonds coming on Thursday.

Separately, the Treasury Department reported a $165.04 billion budget deficit during July. Economist surveyed by Briefing.com expected Treasury $180.7 billion.

What analysts are saying: The Fed's decision to reinvest proceeds from maturing assets into Treasurys, suggests the central bank is willing to keep its economic stimulus measures in place for some time to come.

"The decision reinforces the message that monetary policy is set to remain exceptionally accommodative for the foreseeable future," said John Higgins, an analyst at Capital Economics.

Given current economic conditions, the Fed is not expected to hike interest rates until 2012, he said. The central bank cut its benchmark rate to a range near zero percent in December 2008 to help support the economy.

"As a result, we think there is little scope for long-term Treasury yields to fall further," Higgins said. 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 fixed4.32%4.26%
15 yr fixed3.36%3.27%
5/1 ARM3.37%3.27%
30 yr refi4.31%4.24%
15 yr refi3.34%3.25%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 4:47am ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17

Sections

GM won't have to tell customers to keep their recalled cars parked until fixed, after a federal judge denied emergency motion Thursday. More

Obamacare sign ups hit 8 million, though final enrollment remains to be seen. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

As Detroit moves closer to reaching a bankruptcy deal, retired civilian workers are poised to be left worse off than firemen and police officers. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.