Treasurys fall as foreign debt concerns ease

AP News
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Posted: Dec 18, 2009 6:00 PM

Government bond prices fell amid quiet trading Friday, failing to extend the big gains logged the day before.

The 10-year note fell 15/32 to 98 20/32, sending its up to 3.54 percent from 3.48 percent late Thursday.

Worries over rising debt levels in Europe that helped support higher Treasury prices on Thursday subsided on Friday. With little economic news to drive trading and no strong direction from stocks, investors booked profits ahead of the weekend.

"There was really no followthrough," said Tom di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC. "Pushing up against the Christmas holiday, there is a general lack of interest in the marketplace at this point."

As the end of the year approaches, many traders have begun to close their books. Next week is also expected to be quiet with the Christmas holiday coming up next Friday.

In other trading, the price of the 30-year bond fell 19/32 to 98 21/32. Its yield rose to 4.46 percent from 4.42 percent.

The two-year note fell 2/32 to 99 29/32, while its yield rose to 0.80 percent from 0.76 percent.

The yield on the three-month T-bill was unchanged at 0.03 percent. Its discount rate stood at 0.04 percent.

The cost of borrowing between banks fell slightly. The British Bankers' Association said the rate on three-month loans in dollars _ the London Interbank Offered Rate, or Libor _ slipped to 0.2513 percent from 0.2534 percent.