Treasurys' 3-day rally ends as nuclear fears lift

AP News
Posted: Mar 17, 2011 5:34 PM

Treasury prices fell Thursday after three days of gains as worries over Japan's nuclear crisis eased.

The price on the 10-year Treasury note fell 56 cents per $100 invested in late trading. Its yield, which moves in the opposite direction, rose to 3.26 percent from 3.20 percent late Wednesday.

Traders put money back into the stock market after news out of Japan didn't indicate that the situation at the damaged nuclear reactors was worsening. Bond prices had rallied over the last three days as investors sought safer assets because of growing fears over Japan's nuclear crisis.

"Investors were confronted with major uncertainties, potential cataclysmic events," said Kim Rupert, managing director of global fixed income analysis at Action Economics. "Some of that is coming off today."

Better-than-expected manufacturing and jobs data also persuaded investors to dump Treasurys.

The Federal Reserve said Thursday that factory output increased in February for the sixth month in a row, a sign more hiring could be on the way. Fewer people applied for unemployment benefits last week, the third decline in four weeks, the Labor Department said. Also, the Conference Board said its index of leading indicators rose for the eighth consecutive month in February.

In other trading, the price on the 30-year Treasury bond fell $1.15 per $100 invested, while its yield rose to 4.44 percent from 4.38 percent late Wednesday. The yield on the two-year note edged up to 0.59 percent from 0.55 percent.

The yield on the three-month T-bill fell to 0.07 percent from 0.08 percent. Its discount was 0.08 percent.