Treasurys fall on news of mortgage-bond sale

AP News
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Posted: Mar 21, 2011 5:45 PM
Treasurys fall on news of mortgage-bond sale

Treasurys slipped Monday after the government announced plans to start selling $142 billion in mortgage bonds and worries about Japan started to fade.

The Treasury said that it will sell up to $10 billion of mortgage-backed bonds each month beginning in March. The Monday announcement marks another step by the government to end emergency programs launched in 2008 and 2009 to help markets through the financial crisis.

The sales also add to the supply of government-backed bonds in the market and could draw investors away from lower-paying Treasurys.

In afternoon trading, the 10-year Treasury note fell 50 cents per $100 invested. Its yield rose to 3.33 percent from 3.27 percent late Friday. Bond yields rise when prices fall.

As fears about Japan's stricken nuclear reactors eased, investors didn't feel the need to stock up on Treasury bonds. The Nuclear Regulatory Commission said the situation at the Fukushima Dai-ichi plant appeared to be stabilizing. Containment at three of the plant's six reactors was intact, the commission said.

The price on the 30-year bond fell 56.2 cents. Its yield rose to 4.45 percent from 4.42 percent.

The yield on the three-month T-bill rose to 0.08 percent from 0.06 percent. Its discount was 0.09 percent.