Treasury prices soar on worries over Greece

AP News
Posted: Jun 15, 2011 5:23 PM
Treasury prices soar on worries over Greece

Treasury prices soared as investors flocked to the relative safety of U.S. government bonds as the crisis in Greece escalated. Thousands of protesters hurled rocks at riot police in Athens.

The price of the 10-year Treasury note rose $1.09 for every $100 invested Wednesday. The dip in price pushed the yield down to 2.97 percent from 3.10 percent Tuesday. Bond prices rise when their yields fall.

Greeks were protesting the cutbacks required to avoid a default on the government's debt. On Monday, Standard & Poor's slashed Greece's creditworthiness to the bottom of the 131 countries that have ratings. Traders usually rush to lower-risk assets like U.S. government bonds during times of global instability.

Treasurys also got a boost on the latest signs that the U.S. recovery is fading. A report on manufacturing in the New York area came in far below forecasts, reigniting fears that factory production may be weaker than many economists had believed.

The 30-year bond rose $1.68, sending its yield down to 4.20 percent from 4.30 percent. The yield on the two-year Treasury note fell to 0.38 percent from 0.44 percent.

The three-month Treasury bill paid a yield of 0.04 percent, at a discount of 0.05 percent.