Treasury rates near '11 low after Greece downgrade

AP News
Posted: May 09, 2011 5:16 PM
Treasury rates near '11 low after Greece downgrade

Government bond yields hovered near their lowest levels this year after Standard & Poor's cut Greece's credit rating.

The rating agency downgraded Greece's credit on Monday, citing greater odds that a restructuring of Greek debt will cause losses for creditors. S&P's move rattled Europe's markets and sent investors into Treasurys, which traders often use as a hiding spot when they expect trouble in other markets.

The yield on the 10-year note ended the trading day at 3.15 percent, the same as late Friday. Its price was also unchanged. The yield on the 2-year note dropped to 0.55 percent from 0.56 percent. When bond prices rise their yields fall.

The 10-year Treasury yield sank as low as 3.13 percent on Friday, its lowest level this year. Traders rushed into Treasurys after a German magazine reported that Greece was considering dropping the euro currency. Greece's government denied the report.

The only Treasury that fell Monday was the 30-year bond. It dropped 31.2 cents, raising its yield to 4.31 percent from 4.28 percent late Friday.

In the market for short-term Treasury bills, the three-month T-bill paid a 0.01 percent yield. Its discount was 0.03 percent.