Bonds Rise As Oil Prices Increase
Friday June 24, 6:06 pm ET
Bonds Rise on Higher Oil Prices; Data Boost Bonds by Diminishing Chances of Interest-Rate Hikes
NEW YORK (AP) -- Bond prices rose Friday, while stocks fell on rising oil prices. The latest economic data also raised concerns about the economy, helping to boost bonds by diminishing the chances of interest-rate hikes.
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The price of the benchmark 10-year Treasury note rose 9/32 point or $2.81 per $1,000 in face value. Its yield, which moves in the opposite direction, fell to 3.92 percent from 3.96 percent a day earlier.
The 30-year Treasury bond rose 19/32 point to yield 4.22 percent, compared with 4.26 percent a day earlier, according to Moneyline Telerate.
Crude oil futures were up 42 cents at $59.84 per barrel on the New York Mercantile Exchange, a day after oil prices surpassed the $60 per barrel level for a new intraday high.
The Commerce Department announced a 5.5 percent increase in orders to U.S. factories for big-ticket manufactured goods last month, but much of that was a result of soaring demand for commercial aircraft. With transportation orders removed, durable goods orders slipped 0.2 percent in May, the third decline in the past four months.
Wall Street appeared to focus on rising oil prices. The Dow Jones industrial average fell 123.60, or 1.19 percent, to 10,298.
The broader gauges were down as well. The Standard & Poor's 500 index dropped 9 points, or 0.76 percent, to 1,191. The Nasdaq composite index lost 17 points, or 0.84 percent, to 2,053.
In other trading, the benchmark 2-year note rose 1/16 point to yield 3.58 percent, compared to 3.62 percent on Thursday. Intermediate maturities fluctuated between a rise of 3/16 point and 3/32 point.
Yields on one-month Treasury bills were 2.76 percent as the discount rose 0.01 percentage point to 2.73 percent. Yields on three-month Treasury bills were 3.11 percent as the discount rose 0.41 percentage point to 3.41 percent. Six-month yields were 3.28 percent, as the discount rose 0.02 percentage point to 3.17 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, remained at 3.06 percent.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds rose 5/32 point to 116 9/16, from 116 13/32 a day earlier. The average yield to maturity fell to 4.64 percent from 4.65 percent.
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