Treasuries move higher on concerns about economy (AP)
Investors had moved money back into stocks in early trading, but rushed rear into Treasurys after media reports quoted San Francisco Federal Reserve President Janet Yellen as saying problems in the trappings market and banking system could achieve even worse before the economy recovers
The likelihood of prolonged household problems was enough to send anxious investors into the relative safeness of government debt. Treasury prices have notched higher this year inasmuch as of a steep drop in stock valuations — the Dow Jones industrial average and Standard & Poor’s 500 index are both the floor about 14 percent in 2008.
In addition, Lehman Brothers analysts said in a note that Fannie Mae and Freddie Mac ability need greater degree of capital as the aftermath of the credit crisis continues. Lehman said modern accounting rules could need Fannie Mae to raise $46 billion more capital and Freddie to raise $29 billion.
Tom di Galoma, head of Treasurys trading at Jefferies & Co., said he believes Treasury prices will move rigorously higher as banks and brokerages report further losses due to the belief crisis.
“I think you’ll see a reinvestment back into the coffer harbor bid in Treasurys whether or not (the financials) continue to trouble lower,” he said. “These stocks gain lagged the rest of the market, and that shows there’s still much importance out in that place.”
In late trading, the 10-year note rose 20/32 to 99 23/32. Its yield fell to 3.91 percent from 3.98 percent on Thursday, according to BGCantor Market Data. Yields usually move in the adverse direction from prices.
The 30-year slow bond rose 23/32 to 98 3/32. Its yield malignant to 4.50 percent from Thursday’s 4.54 percent.
The 2-year note rose 6/32 to 100 26/32, and yielded 2.44 percent, down from 2.54 percent.
The 3-month Treasury bill’s yield rose to 1.85 percent from 1.83 percent on Thursday, and the discount rate rose to 1.83 percent from 1.81 percent.
There was no economic data to guide investors during the session. However, reports on existing homes, unemployment and consumer sentiment are scheduled for the coming days.
The emporium will also get its first glimpse of second-quarter results. Both Alcoa Inc. and General Electric Co. are on bar to post earnings this week.
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