Treasurys fall as strong retail sales lift stocks

AP News
Posted: Oct 14, 2011 5:23 PM
Treasurys fall as strong retail sales lift stocks

Treasury prices fell Friday after investors abandoned the safety of government bonds on signs of strength in the U.S. economy.

Retail sales grew 1.1 percent in September, the most in seven months. The report is viewed as a key barometer of consumer spending, an important driver of the U.S. economy. Corporate profits were also strong. Google Inc. and Mattel Inc. both reported higher income for the third quarter.

"It is encouraging that spending is holding up, especially as we head into the important holiday season," John Briggs, an RBS fixed income strategist, wrote in a note to clients.

Treasury prices have fallen for seven of the past eight days. Ultra-safe investments such as Treasurys became less appealing as stock markets shot up since last week. Progress in Europe toward resolving that region's debt crisis has encouraged investors.

The price of the 10-year Treasury note fell 53 cents for every $100 invested, pushing its yield to 2.25 percent from 2.18 percent late Thursday.

The 30-year bond fell $1.62 per $100 invested, sending its yield up to 3.23 percent from 3.15 percent late Thursday.

The two-year Treasury note's yield was flat at 0.27 percent. The yield on the three-month Treasury bill was unchanged at 0.02 percent. Its discount wasn't available.