Treasury auctions 7-year note at record low yield

AP News
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Posted: Aug 25, 2011 5:13 PM
Treasury auctions 7-year note at record low yield

The government auctioned seven-year Treasury notes Thursday at a record low yield as turbulence in European markets increased demand for safer investments.

The notes were priced to yield 1.58 percent, slightly higher than the market rate of 1.573 percent just before the auction results were announced. Bond yields fall as their prices rise.

The auction drew strong demand. More dollars were bid for each dollar of debt sold than in auctions over the past 12 months.

Yields fell after Germany's main share index, the DAX, suddenly fell 4 percent in afternoon trading. It later recovered some of its losses to end down 1.7 percent. Traders struggled to explain the sudden decline.

The yield on the 10-year Treasury note fell to 2.24 percent from 2.29 percent late Wednesday. Its price rose 56 cents for every $100 invested.

The yield on the 30-year bond fell to 3.61 percent from 3.65 percent. Its price rose 75 cents for every $100 invested.

The yield on the two-year note fell to 0.22 percent from 0.23 percent.

The three-month T-bill paid a yield of 0.003 percent. Its discount wasn't available.