Treasury prices slip
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April 3, 2001: 9:18 a.m. ET
Government bond traders weigh slumping stocks against economic data
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NEW YORK (CNNfn) - U.S. Treasury bond prices were little changed -- but mostly lower -- in early trade Tuesday as traders weighed continuing weakness in U.S. equities against recent economic data.
Shortly after 9:10 a.m. ET, two-year Treasury notes were flat at 100-2/32, with yields, which move opposite to price, steady at 4.21 percent. Five-year notes fell 2/32 to 104-21/32 to yield 4.61 percent.
Benchmark 10-year notes shed 3/32 at 100-3/32, yielding 4.99 percent. Thirty-year bonds fell 3/32 to 98-8/32 to yield 5.49 percent.
Stocks slump, but rate-cut hopes dim
More profit warnings and job cut announcements, particularly in the technology sector, after the end of trade Monday pulled down U.S. stock futures and kept shorter-dated Treasurys above water, traders said.
Falling U.S. shares typically lead investors to park funds in the relative safety of government debt and heighten worries over the depths of the U.S. economic slowdown.
But Treasurys were mostly lower, as traders waited for economic news on the heels of data Monday that showed surprising strength in U.S. manufacturing and dimmed hopes of a quick interest-rate cut by the Federal Reserve.
Tuesday's economic reports include factory orders in February at 10 a.m. ET, while automakers are slated to release their March sales estimates throughout the day.
Analysts said Treasurys may hold steady for much of the week until an all-important U.S. payrolls report due Friday.
Despite the tumble in stocks Monday -- which brought the Nasdaq to its lowest level since October 1998 -- Treasurys lost ground after a national purchasing managers' survey rose for the second month in a row, causing investors to scale back expectations the Fed could cut interest rates before its next meeting on May 15.
To prevent the sputtering U.S. economy from stumbling into a recession, the Fed has cut short-term interest rates three times this year by a total of 1.50 percentage points to 5 percent.
Dollar falls against yen, euro
The U.S. dollar fell against the yen as Tokyo stocks advanced on expectations the Japanese government would come up with a new economic stimulus package.
The dollar traded at 125.66 yen by late afternoon, down 0.74 yen from late Monday in Tokyo and also below its late New York level of 126.66 yen.
The dollar also fell against the euro, with the common currency trading at 88.44 cents, up from 88.26 cents late Monday.
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- from staff and wire reports
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