Treasurys rise as uncertainty about Italy deepens

AP News
Posted: Nov 09, 2011 4:02 PM
Treasurys rise as uncertainty about Italy deepens

Treasury prices rose Wednesday as a spike in Italy's borrowing costs and political disarray in Greece brought new fears that Europe's debt morass could get worse.

The yield on the benchmark 10-year Treasury note fell to 1.96 percent as of 4 p.m. Wednesday, down from 2.08 percent late Tuesday. Its price rose $1.03 per $100 invested.

The government also auctioned $24 billion in 10-year notes at a yield of 2.03 percent. The yield at the last auction for the same notes was 2.27 percent on Oct. 12.

Investors bid up safe-harbor assets like Treasurys as investors abandoned Italian government bonds, sending Italy's borrowing costs above 7 percent. Italian Premier Silvio Berlusconi, widely seen as an impediment to reform, has promised to leave but it's not yet clear who would replace him.

In Greece, talks on naming a new prime minister collapsed. That worsened fears that the country may not get its next installment of emergency loans needed to avoid default.

In other trading, the yield on the 30-year Treasury bond fell sharply, to 3.02 percent from 3.14 percent. Its price soared $2.44 per $100 invested.

The yield on the two-year note fell to 0.23 percent from 0.25 percent.

The three-month T-bill paid a yield of 0.01 percent, down from 0.02 percent. Its discount wasn't available.