[Fair Use: For Educational/Research Purposes Only]

Link

FEBRUARY 10, 18:47 EST

Bond Prices Fall Sharply

NEW YORK (AP)  Government bond prices fell sharply across-the-board Thursday after investors greeted a $10 billion government auction of new long-term securities with a notable lack of enthusiasm.

Bids received on the notes were the lowest in at least 17 years, analysts said. The auction was the final phase of a $32 billion quarterly government refinancing.

The price of the 30-year bond fell 1 9/16 points, or $15.63 per $1,000 in face value. Its yield, which moves in the opposite direction of price, rose to 6.43 percent from 6.32 percent late Tuesday.

It was the second straight losing session for the benchmark long-term bond. The bond fell 1 3/16 points, or $11.87 1/2 , on Wednesday.

Bond market volatility has mirrored the rapid and violent swings in the U.S. stock markets since a recent announcement that the federal government plans to pay down the national debt by reducing the amount of bonds in circulation.

Bond prices rose sharply late last week on fears that the supply of the highly popular 30-year bond would dwindle. Now the prices are falling as rapidly as they climbed.

The volatility has kept many investors out of the Treasury markets, which has reduced liquidity  or the ability to make trades. And that lack of liquidity has only contributed to the market's roller coaster behavior.

Only $13.3 billion in bids was received for the $10 billion in bonds sold Thursday, an unusually light display of trader interest.

Prices of short-term Treasury securities were unchanged or fell 1/32 point Thursday, while intermediate maturities fell 9/32 point or 27/32 point, according to the Bridge Telerate news service.

In other trading Tuesday, yields on three-month Treasury bills were 5.65 percent, with the discount falling 0.03 percentage point from Wednesday to 5.49 percent. Six-month yields were 5.96 percent as the discount fell 0.01 percentage point from Tuesday to 5.70 percent. One-year yields finished at 6.17 percent, with the discount rising 0.01 percentage point to 5.82 percent.

Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.

The federal funds rate, the interest on overnight loans between banks, rose to 5.81 percent from Wednesday's 5.75 percent.

The Bond Buyer index of municipal bonds fell 3/32 point to 91 29/32. The yield was 6.26 percent, up from 6.25 percent Wednesday.

-- snooze button (alarmclock_2000@yahoo.com), February 11, 2000

Answers

Here's a better link to story:

Link

-- snooze button (alarmclock_2000@yahoo.com), February 11, 2000.