Bonds rally as credit fears sap confidence

Prices for U.S. Treasurys climb as investors seek safe-haven assets amid Dubai World debt concerns.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Ben Rooney, CNNMoney staff reporter

Click the chart for current bond prices and yields.
G-20 summit: 6 countries in recovery
The G-20's six largest economies took a big hit during the global recession in the past year and a half. Challenges remain but most appear on the path to recovery.

NEW YORK ( -- Treasurys jumped Friday as investors flocked to the perceived safety of U.S. debt amid concerns about Dubai World's credit problems.

"There's a global flight to fixed income," said Dan Greenhaus, chief economic and bond strategist at Miller, Tabak & Co in New York. "It's the end of the year and people are concerned about protecting their gains."

The rally comes two days after Dubai World, the finance arm of Dubai, requested a postponement of payments on nearly $60 billion in debt. The move revived concerns about the global banking system and caused investors to shy away from more risky assets such as stocks.

Dubai, which is one of seven emirates that make up the United Arab Emirates, borrowed billions over the last several years to fuel a construction boom.

But the emirate was hit hard by the credit crunch and investors are concerned about the possible fallout if Dubai World is forced to liquidate assets at fire-sale prices. That could put many big British banks, and possibly some U.S. banks, at risk.

"It's reminding people that the emerging market play is not all in one direction and that there are risks in the sector," Greenhaus said.

Stocks plunged in early trading, with the Dow Jones industrial average dropping more than 200 points, as investors began a holiday-shortened trading day in New York. All U.S. markets were closed Thursday for the Thanksgiving holiday.

Asian markets closed sharply lower, with Japan's Nikkei closing down 3.2% and the Heng Seng in Hong Kong tumbling nearly 5%. European markets recovered from a sharp selloff in the previous session, with the CAC-40 up more than 1%.

Commodities markets were also pummeled by the Dubai World news. Oil prices sank more than 2% while gold prices fell by $13 per ounce.

In the currency markets, the pound and euro bore the brunt of the market's aversion to risk. The UK currency was down 0.6% and the 16-nation unit slid 0.7%.

Treasury prices. The benchmark 10-year note was up 28/32 to 101 15/32 and its yield fell to 3.21% from 3.28% on Wednesday. Bond prices and yields move in opposite directions.

The 2-year note rose 3/32 to 100 5/32 and its yield sank to 0.7%.

The 30-year bond advanced 22/32 to 102 28/32. Its yield was 4.21%.  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

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: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. 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 2018 and/or its affiliates.