Treasury prices fall as stocks move higher
NEW YORK — Treasury prices fell for a second straight day Friday as buying picked up on Wall Street after a mixed report on the labor market.
Stock prices rose Friday, putting pressure on bonds, after the Labor Department said job losses slowed last month to their lowest level in a year. However, the unemployment rate increased to 9.7 percent, more than the 9.5 percent rate the market anticipated and the highest since June 1983.
Though the report was mixed, investors seemed to focus on the fact that job losses are abating. Many analysts say the market has already factored in an unemployment rate of at least 10 percent.
Stock indexes rose at least 1 percent, including the Dow Jones industrials, which rose about 97 points. Typically when traders increase positions in stocks, the price of safer assets like government bonds fall.
The steepest declines were among long-term Treasurys. A coming round of long-term Treasury auctions also weighed on the market.
“Payrolls this morning came in mixed, roughly in line with consensus forecasts,” said Michael Pond, interest rate specialist at Barclays Capital. “That allowed the market to focus on next week’s supply.”
The Treasury will offer $20 billion of 10-year notes and $12 billion of $30-year bonds, slightly more than the market anticipated. The government will also issue $38 billion of 3-year notes.
In late day trading, the price of the benchmark 10-year note fell 26/32 to 101 16/32, pushing its yield up to 3.45 percent from 3.35 percent.
The 30-year bond fell 1 27/32 to 103 28/32. Its yield jumped to 4.27 percent from 4.16 percent.
Treasury prices extended losses logged on Thursday that broke four days of gains, which came as stocks hit a temporary lull in their six-month rally.
In other trading, the two-year note was unchanged at 100 4/32, and its yield held steady at 0.93 percent.
The yield on the three-month T-bill was flat at 0.12 percent. Its discount rate was 0.13 percent.
The cost of borrowing between banks dipped. The British Bankers’ Association said the rate on three-month loans in dollars — the London Interbank Offered Rate, or Libor — fell to 0.31 percent from 0.32 percent.
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