Treasury prices lower on hopes from Europe talks

AP News
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Posted: Dec 06, 2011 5:25 PM
Treasury prices lower on hopes from Europe talks

Investors stayed away from Treasurys Tuesday on hopes that European leaders will be able to reach a viable solution to that region's debt crisis.

The benchmark 10-year Treasury fell 43.7 cents for every $100 invested. The yield edged up to 2.09 percent, from 2.04 percent late Monday.

A crucial summit of European leaders wraps up Friday. Traders hope to see concrete solutions to restore long-term confidence in the euro and rescue the region from the sovereign debt crisis that has roiled world markets for months.

Threatened by fears their joint currency may not survive, German Chancellor Angela Merkel and French President Nicolas Sarkozy are trying to change European Union treaties to tighten controls over spending and borrowing for the countries that use the euro. These steps reinforced market expectations that EU leaders at a Friday summit would finally contain, through tighter financial rules, the two-year-old debt crisis that has engulfed the continent and threatens the entire global economy.

Adding to the pressure, Standard & Poor's warned it could downgrade 15 euro zone nations as well as Europe's bailout fund if European leaders don't act. And U.S. Treasury chief Timothy Geithner began a three-day European tour on Tuesday to prod euro zone nations into action.

The 30-year Treasury bond fell $1.31. Its yield edged up to 3.10 percent from 3.02 percent.

The yield on the two-year note rose to 0.25 percent from 0.24 percent.

In the market for T-bills, the three-month bill paid a 0.01 percent yield. Its discount was unavailable.