Treasurys rising as debt debate escalates

AP News

7/28/2011 6:04:15 PM - AP News

Bond investors looked past a surprising drop in new applications for unemployment benefits Thursday and continued buying Treasury bonds as the debt ceiling debate continued for another day.

Investors typically sell bonds following signs that the economy is improving. But government bond prices rose Thursday as investors grew concerned that any cuts in government spending could harm the economy.

The Treasury Department sold $29 billion in seven-year notes at a yield of 2.28 percent, the lowest rate of the year.

The price of the 10-year Treasury rose 62 cents for every $100 invested. That sent the yield down to 2.95 percent from 2.97 percent late Wednesday.

The 30-year bond rose 66 cents for every $100 invested. Its yield was down slightly to 4.26 percent from 4.29 percent late Wednesday.

In the market for short-term Treasury bills, the yield on the 3-month Treasury bill remained at 0.07 percent. Its discount was 0.08 percent.