Treasury yields end rough week higher

By Blake Ellis, staff reporter


NEW YORK (CNNMoney.com) -- Treasury yields rebounded Friday after hovering near yearly lows in earlier trading, as stocks trimmed losses.

What yields are doing: The yield on the benchmark 10-year note rose to 2.62% from 2.57% late Thursday. But this was down from 2.68%, where the yield closed last Friday.

The yield on the 30-year bond edged up to 3.66% from 3.65%, while the yield on the 2-year note ticked up to 0.50% from 0.49%. The 5-year note yielded 1.46%, up from 1.40% on Thursday.

Despite Friday's turnaround, which came as stocks ended lower but pared some losses, Treasury yields have been stuck at yearly lows nearly every day this week.

On Thursday, disappointing economic data dragged the 10-year yield to the lowest level since March 2009, while the long-bond's yield sank to the lowest level since April 2009 and the 5-year yield dipped to the lowest level since January 2009. Meanwhile, the 2-year note fell to its record low of 0.49%.

Flight to safety: As worries about an economic slowdown persist and stocks tumble, investors have been shying away from riskier assets and flocking to the safety of the bond market.

But how long can the safe haven bid last?

"It all depends on the economy, and economic activity has been a bit slower than what we would have expected," said Carolyn Dolan, a principal at Samson Capital Advisors. "We're already in the low [2% range], so we may stay near the bottom until we start seeing numbers showing a turnaround."

While a rebound in the stock market would help yields rise, the employment picture has to improve for investors to regain confidence.

"The biggest thing we need to have is a series of better employment numbers," she said. "This is really key to the situation. Otherwise, yields have proven they can keep going lower."

And because thin trading during summer months typically exaggerates the market's moves, investors will be keeping a close eye on October's economic data for clues about the economic recovery, she said.  To top of page

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