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Treasury yields hit new lows on manufacturing drop

AP News
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Posted: May 17, 2011 5:14 PM
Treasury yields hit new lows on manufacturing drop

Government bond yields fell to their lowest levels this year Tuesday after two economic reports cast doubt on the economy's strength.

The Federal Reserve reported that U.S. factories produced fewer goods in April for the first time in 10 months. A separate report from the Commerce Department showed new home construction plunged last month.

The gloomy economic news sent traders into Treasurys, pushing up prices and lowering yields. Traders tend to buy Treasurys when the economy appears softer.

The price of the 10-year note rose 21.8 cents for every $100 invested. The higher price drove the yield down to 3.12 percent from 3.15 percent late Monday.

In other trading, the yield on the two-year note edged down to 0.52 from 0.53 percent. The yield on the 30-year bond fell to 4.23 percent from 4.27 percent.

The yield on the three-month T-bill rose to 0.03 percent from 0.01 percent. Its discount was 0.04 percent.