A weak reading on factory orders helps push Treasurys up; 10-year yield nears 2010 low

Monday, October 4, 2010

Treasurys move higher; Factory orders slip

NEW YORK — Treasurys edged higher on Monday after a government report showed a slip in factory orders.

The Commerce Department said orders to factories fell 0.5 percent in August, slightly worse than economists expected. It’s also the third drop in four months.

The 10-year Treasury note was up 28 cents to $101.21. The higher price knocked the yield down to 2.48 percent. Bond prices and yields move in opposite directions.

That put the 10-year yield closer to its low for the year of 2.42 percent, reached Aug. 25. The yield is a widely used benchmark for interest rates on mortgages and corporate debt.

Traders have pushed Treasury yields lower in recent weeks, because they expect the Federal Reserve will try to sink long-term interest rates to spur borrowing and spending.

Other Treasurys moved little since Friday. The two-year note traded around 99.91 at a 0.41 percent yield, compared with 0.42 percent late Friday. The 30-year bond moved up 9.3 cents to 102.93. It paid a 3.70 percent, unchanged from late Friday.

The three-month T-bill paid a 0.12 percent yield with a discount of 0.13 percent.

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