Treasury yields climb slightly as market calms

AP News
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Posted: Jun 04, 2012 4:02 PM
Treasury yields climb slightly as market calms

U.S. Treasury yields rose slightly on Monday, a small spot of relief in a market that has been violently flogged for the past month.

The yield on the benchmark 10-year Treasury note rose to 1.52 percent, above Friday's 1.46 percent.

Bond yields were driven down Friday by panic over a lousy jobs number in the U.S. and concerns about Spain's faltering banking industry. The low yield of 1.44 percent that day was a record low. Monday's yield was still below what was, until last week, the previous record low: 1.55 percent, in 1945.

A low yield on a Treasury note is a sign that investors are nervous about the economy, because they're willing to accept very low rates of return on U.S. government bonds rather than risk putting money into the stock market.

In the past two decades, the yield on the 10-year has averaged 4.7 percent.

Monday's small yield increase was matched by relative calm on Wall Street. The Dow Jones industrial average edged down 17 points, but that was easy to stomach after Friday's 275-point plunge.

The price of the 10-year Treasury fell 66 cents for every $100 invested as demand for them fell.

In other trading, the yield on the 30-year bonds rose to 2.56 percent from 2.54 percent. Its price fell 91 cents for every $100 invested.

The two-year Treasury yield rose to 0.25 percent from 0.24 percent. The three-month T-bill stayed at 0.06 percent.