Treasury prices rise on Libyan protests

AP News
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Posted: Feb 22, 2011 5:16 PM
Treasury prices rise on Libyan protests

Treasury prices climbed Tuesday as unrest continued in Libya, sending traders into safer investments.

The price of the 10-year Treasury note rose 90.6 cents per $100 invested. Its yield, which moves in the opposite direction, fell to 3.46 percent from 3.59 percent late Friday. The market was closed Monday for the Presidents' Day holiday.

"We're seeing a pretty significant flight to safety," said Josh Stiles, an analyst at IDEAGlobal.com. "We did get some strong data today, but that was overlooked in the face of the scary headlines coming out of Libya."

Investors abandoned stocks and poured money into government bonds as violence escalated between Libyan protesters and loyalists to the country's leader Moammar Gadhafi. Oil prices also spiked.

Traders largely ignored news that U.S. consumer confidence rose to its highest level in three years this month, topping economists' expectations, according to private research group The Conference Board.

The Treasury Department also sold $35 billion in two-year notes on Tuesday. Stiles called the auction "decent, but not great." The government is set to auction off $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.

The National Association of Realtors reports on January sales of previously owned homes on Wednesday. Data on new home sales, jobless claims and durable goods are due out Thursday. On Friday the government releases its revised estimate of fourth-quarter gross domestic product.

In other trading, the price of the 30-year Treasury note rose $1.43 per $100 invested, while its yield fell to 4.61 percent from 4.69 percent late Friday. The yield on the two-year note slipped to 0.70 percent from 0.75 percent.

The yield on the three-month T-bill was unchanged at 0.09 percent. Its discount was 0.1 percent.