Treasury prices slip ahead of holiday weekend

AP News
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Posted: May 27, 2011 3:37 PM
Treasury prices slip ahead of holiday weekend

Treasury prices dipped Friday in light trading ahead of the holiday weekend.

Bonds got an early boost from a report showing that after-tax income adjusted for inflation came in flat for the second straight month. Another report showed that the number of people who signed contracts to buy homes fell sharply in April. Both renewed concerns that the economic recovery could be slowing.

The price of the 10-year Treasury note slipped 12.5 cents per $100 invested in late trading. Its yield, which moves in the opposite direction, rose to 3.08 percent from 3.06 percent late Thursday.

Treasury prices settled down in later trading, though their yields remain near their lowest levels of the year. That helped to keep a lid on buying, said Kim Rupert, managing director of global fixed income analysis at Action Economics.

Investors will look to next Friday's employment report for more insight into how the economy is doing. Other important releases next week include consumer confidence, construction spending, auto sales, manufacturing, first-quarter productivity, factory orders and retail sales.

"We've seen a lot of disappointing data in the last month, so there are concerns whether this slowdown is temporary or the start of something worse," Rupert said.

In other trading, the price of the 30-year Treasury bond fell 34.38 cents per $100 invested, while its yield rose to 4.25 percent from 4.22 percent late Thursday. The yield on the two-year note slipped to 0.48 percent from 0.49 percent.

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

The trading session was shortened Friday because of the Memorial Day holiday.