Treasury prices higher on worries over Europe

AP News
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Posted: Dec 08, 2011 4:52 PM
Treasury prices higher on worries over Europe

U.S. government bond prices rose Thursday as nervous investors shifted money into conservative assets over worries that a solution to the European debt crisis might not be reached soon.

The price of the benchmark 10-year Treasury note rose 56.2 cents for every $100 invested. The higher price lowered its yield to 1.97 percent from 2.03 percent late Wednesday.

The European Central Bank President Mario Draghi said there was no existing plan for large-scale government bond purchases, as investors had hoped. The Dow Jones industrial average closed down 198 points.

Draghi's remarks sent borrowing costs soaring for Italy, Spain and other countries with heavy debt burdens.

The 30-year Treasury bond rose $1.43, and its yield dropped to 2.99 percent from 3.06 percent Wednesday. The yield on the two-year note inched down to 0.23 percent from 0.24 percent.

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