Treasurys fall after stock markets stabilize

AP News
Posted: Sep 23, 2011 5:53 PM
Treasurys fall after stock markets stabilize

Treasury prices fell after the broader stock markets calmed down, reducing traders' appetite for lower-risk government bonds.

For most of the week Treasury prices rose while stocks fell on fears that Europe's debt problems would lead to a global financial crisis. Another worry was that the U.S. is headed for another recession and that policy makers are running out of ways to fight it.

The week's price increases also stemmed from the Federal Reserve board's decision to shift $400 billion from short-term debt into long-term debt in a bid to drive down borrowing costs and spur the economy.

Lower interest rates might spur investment and spending. Both slowed as the economy weakened this year.

On Friday, finance ministers from 20 large countries pledged to take "all necessary actions to preserve the stability of the banking systems and financial markets."

Friday, the benchmark 10-year Treasury note fell $1.16 for every $100 invested. Its yield, which moves inversely to prices, rose to 1.84 percent from the previous day's 1.73 percent. That was down from 2.07 percent last Friday. 10-year yields touched a record low of 1.71 percent Thursday.

The 30-year bond's yield was 2.90 percent, up from 2.80 percent late Thursday. Its price fell $4.25.

The yield on the two-year note rose to 0.22 percent from 0.21 percent.

The three-month T-bill was up to 0.01 percent from -0.01 percent Thursday. Its discount wasn't available.