Anthony Cronin News
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Treasuries dropped, pushing 10-year note yields to the highest level since October, a day after the Federal Reserve raised its assessment of the U.S. economy and sapped demand for the safety of government debt.
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Treasuries fell as a report showed weekly jobless claims matched a four-year low and Federal Reserve Chairman Ben S. Bernanke for the second day failed to indicate the central bank will boost economic stimulus.
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U.S. stocks climbed, sending the Dow Jones Industrial Average to its first close above 13,000 since 2008, as confidence jumped to a one-year high and oil retreated for a second day. The euro gained before the European Central Bank provides funds tomorrow to support banks.
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Treasuries fell as speculation Greece is closer to receiving international funding reduced the haven appeal of government securities as the U.S. sold $32 billion of three-year notes.
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Treasury 30-year bonds rallied the most in more than a year as the Senate approved a debt-limit increase and a report showed personal spending unexpectedly fell in June, reinforcing speculation the economy is slowing.
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Treasury 10-year notes fell for the first time in five days as a report showed manufacturing in the U.S. expanded in December at the fastest pace in six months, damping demand for the safety of government debt.
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Treasuries rose after an increase in borrowing costs in Spain, Hungary and France added to concern Europe’s debt crisis is spreading, boosting demand for the safest assets.
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Treasuries rose for a third day, pushing benchmark 10-year note yields to within a quarter- percentage point of a record low, on concern Europe’s debt crisis will curb global growth.
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Price swings in the Treasury market are at the lowest level since June with investors reluctant to sell U.S. debt amid concern European leaders will be unable to contain the region’s sovereign-debt crisis.
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Treasuries had the biggest annual return since the depths of the financial crisis in 2008 as Europe’s debt turmoil spurred investor demand for refuge even as Standard & Poor’s cut America’s credit rating.
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