Treasury note and bond prices ended slightly higher yesterday, even though the day's only economic news, the 10-day car sales figures, showed more strength than expected.
Late in the day, the 30-year bond was up 1/16 to yield 8.33%.
Joseph Liro, a money market economist at S.G. Warburg & Co., said the tiny bounce was not surprising since Treasury prices had sold off both Monday and Friday.
"We consolidated after two down days," Mr. Liro said. "That fact that we didn't bounce higher, I think you have to take as a negative."
Prices moved higher during the morning, bolstered in part by the news that Ford Motor Co.'s late-May sales fell 20%.
The market gave back those gains early in the afternoon when a big seller of bond futures contracts sent prices lower across the board, then improved a little in late trading.
A government bond trader said activity was very thin and "the market's susceptible to being pushed around."
With most of the car companies' sales figures in late yesterday, analysts estimated car sales rose to a 6.6 million unit pace in late-May. That is up from the 5.8 million unit rate in mid-May, but still below the 7.1 million in the same period a year ago.
That brings sales for all of May to a 6.0 million rate, up from 5.5 million in April.
"It sems that May is higher than April, but they're still looking pretty crummy," said Robert Dieli, a business economist at Northern Trust Co.
Mr. Dieli said May is traditionally a good selling month for the auto industry, so the seasonal adjustment factors may have made sales look weaker than they were.
And he pointed out that the sales rate is till exceeding manufacturers' production rates, "so they wouldn't be accumulating inventories."
Still, he said, the late-May sales pace "is not the sort of thing that's going to lead to them putting on second and third shifts in Michigan."
The auto industry is usually one of the first sectors of the economy to emerge from a recession, and traders have been watching the 10-day sales figures closely. But yesterday, the numbers "didn't seem to make that much difference" to the market, a government coupon trader said.
"There are a lot of unanswered questions, and people are having a hard time trading the market," the trader added.
Traders are hoping those questions will be answered on Friday, when the market gets May's employment report.
Today and tomorrow, there will be little news of interest except for the weekly jobless claims.
Mr. Liro said the market was resting above good technical support at the 94 level on the September bond futures contract.
"I think that support will hold, given the lack of new fundamental information; so if there's a bias, it would be to move higher," he said, adding that if the support levels are broken, "it could be very ugly."
The September bond future contract closed 1/32 lower at 94 7/32.
In the cash market, the 30-year 8 1/8% bond was 1/16 higher, at 97 18/32 - 97 22/32, to yield 8.33%.
The 10-year 8% note rose 1/8, to 99 2/32 - 99 6/32, to yield 8.11%.
The 7% three-year note was up 1/16, at 99 16/32 - 99 18/32, to yield 7.16%.
Treasury Market Yields
Tuesday Week Month
3-Month Bill 5.73 5.55 5.67
6-Month Bill 5.95 5.85 5.89
1-Year Bill 6.23 6.07 6.12
2-Year Note 6.76 6.64 6.81
3-Year Note 7.16 7.04 7.08
4-Year Note 7.36 7.28 7.33
5-Year Note 7.77 7.66 7.67
7-Year Note 7.98 7.90 7.91
10-Year Note 8.11 8.05 8.05
20-Year Bond 8.33 8.28 8.24
30-Year Bond 8.33 8.28 8.24
Source: Cantor, Fitzgerald/Telerate