Treasury yields sink to record low on Europe fears

AP News
Posted: Jul 24, 2012 6:02 PM
Treasury yields sink to record low on Europe fears

NEW YORK (AP) — Escalating fears over the European debt crisis sent traders into the U.S. Treasury market, driving a key lending rate back to a record low.

The surge in demand pushed the 10-year Treasury yield down to 1.39 percent Tuesday, beating the record low of 1.40 percent reached Monday. The price of the note rose 40.6 cents per $100 invested.

Strong demand also resulted in a record bid for two-year Treasury notes at an auction of debt Tuesday, according to the investment bank Jefferies. Buyers placed $4 in bids for every $1 of notes up for sale.

News reports of more trouble for Greece and Spain helped send their borrowing costs higher as traders sold off their government bonds. Traders shifted money into the U.S. government bond market, seen as a safe spot to stash money, which pushed their yields lower.

In other trading, the yield on the 30-year Treasury bond fell to 2.46 percent from 2.51 percent. Its price rose $1.09 per $100.

The yield on the two-year Treasury note fell to 0.21 percent from 0.22 percent. The three-month T-bill paid a yield of 0.10 percent.