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Treasurys rise on Europe's woes, note auction

Tue May 17, 2011 5:14 PM EDT
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Associated Press
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NEW YORK — Government bond prices rose Tuesday on more troubling news about Europe's debt woes, which led to a successful sale of new two-year notes.

The price on the 10-year Treasury note rose 9.37 cents per $100 invested in Tuesday trading. Its yield fell to 3.11 percent from 3.13 percent late Monday.

Treasury sold $35 billion in two-year notes, which yielded 0.56 percent, the lowest in since a November auction. It was the first of a three-part debt sale this week.

The yield on the two-year note fell to 0.50 percent from 0.52 percent. The yield on the 30-year bond fell to 4.25 percent from 4.27 percent. Its price rose 37.5 cents.

A barrage of bad news out of Europe led investors to keep buying U.S. Treasurys. Moody's warned that a restructuring of Greece's debt would be considered a default and would hurt the credit ratings of Greece and other debt-laden European countries.

The three-month T-bill paid a yield of 0.04 percent, unchanged from Monday. Its discount was 0.05 percent.

© 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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bestquest

Low interest rates payed for US bonds may be short lived. We have three or four elements to fix to avoid collapse.

One: lower spending and very few look at pentagon and wars costs vs. benefits.

Two: Government employment at fed, state and local has grown too large. All must cut back as any company would when income dips.

Three: manufacturing is improving here because job ads are better quality, both job descriptions and company's reputations - fewer contract, more full time. This may help hire our college grads and those pros over 45 years of age. Underground mining equipment company in Australia is recruiting amongst long term unemployed, so maybe the stigma will become less a factor here.

Four: housing is the 800 pound gorilla and we need to get families into their own house asap. Option is to let the market rule and just slug it out for the next 4 to 7 years.

    Reply#1 - Tue May 17, 2011 11:50 PM EDT
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