Bond prices rise on European credit crisis

AP News
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Posted: May 23, 2011 5:25 PM
Bond prices rise on European credit crisis

Investors bought up Treasurys Monday on growing concerns over Europe's debt crisis.

The price on the 10-year Treasury note rose 12.5 cents per $100 invested in late trading. Its yield, which moves in the opposite direction, fell to 3.13 percent from 3.15 percent late Friday.

Over the weekend, Standard and Poor's cut its outlook for Italy's bonds on worries about low growth and high debt. Fitch Ratings agency on Monday lowered the outlook for Belgium's government debt, citing the risk that disagreements over a new government could hurt the country's drive to lower debt.

Voters in Spain ousted the governing Socialist party in local and regional elections, raising doubts over the country's ability to implement austerity measures. Meanwhile, Greece decided to immediately sell state stakes in several major enterprises to deal with its financial crisis.

Traders worry that the ongoing financial crisis in Europe could slow global economic growth. Investors seek Treasury bonds as a safe haven when the economy appears softer.

In other trading, the price of the 30-year bond rose 50 cents per $100 invested, while its yield fell to 4.27 percent from 4.30 percent. The yield on the two-year note was unchanged at 0.52 percent.

In the market for short-term Treasury bills, the three-month T-bill paid a 0.04 percent yield. Its discount was 0.05 percent.