WASHINGTON -- Friday's rally in Treasury securities fizzled yesterday, contrary to some analysts' predictions.
Instead, renewed weakness in the dollar and two strong economic reports pushed the 30-year bond down by nearly 1/2 point at midday, before the bond reclaimed some of what it lost.
Late yesterday, 30-year bonds were quoted down 5/32 at a price of 94 21/32, pegging the yield at 7.97%, unchanged from Friday. The 10-year note slipped two ticks to 96 7/32 with a 7.8% yield.
The short end also lost a little ground. Yields on three-month bills rose three basis points to 5.16%, and six-month bills were up two basis points to 5.67%.
The dollar fell against both the Japanese yen and German mark yesterday. Mean-while, household income surged 0.6% in September, the biggest gain in five months, the government said. And the Chicago Purchasing Managers index gained a point to 64.3% in October, with its price and employment components rising.
Bonds rallied nearly a point Friday on the third-quarter gross domestic product report. Yesterday's decline was inconsequential, analysts said. It was impressive that the market essentially traded sideways in the face of all the negative news, they said.
"Today's numbers didn't allow the market to go up," said Peter McTeague, market strategist with MCM Money Watch-Boston. "Friday's rally may have been put on hold for a couple of days."
But in general, the bears still call the shots, McTeague and others maintained.
Treasury Market Yields Previous Previous Monday Week Month3-Month Bill 5.14 5.12 4.836-Month Bill 5.65 5.68 5.491-Year Bill 6.13 6.21 6.012-Year Note 6.82 6.79 6.653-Year Note 7.04 7.09 6.945-Year Note 7.47 7.50 7.337-Year Note 7.63 7.67 7.4810-Year Note 7.79 7.83 7.6530-Year Bond 7.96 8.03 7.85
Source: Cantor/Fitzgerald/Telerate
Stats
Stock Market: The Dow Jones Industrial Average fell 22.54 points yesterday to close at 3908.12.
Foreign Exchange: In late New York trading yesterday, the dollar was quoted at 96.91 Japanese yen and 1.5033 German marks.
Commodities: The Commodity Research Bureau's index closed down 1.18 points yesterday at 233.30.
