Yields on short-term T-bills hit a nine-year low.

The Treasury Department sold $7.82 billion in new three-month bills at an average discount rate of 5.12%, down from 5.32% last week. Another $7.82 billion was sold in new six-month bills at an average discount rate of 5.17%, down from 5.35% last week. The rates were the lowest since three-month bills sold for 5.04% on July 1, 1977, and six-month bills averaged 5.17% on June 13, 1977. The new discount rates understate the actual return to investors--5.26% for three-month bills and 5.38% for six-month bills. The discount rate reflects the price discount received when government securities are purchased at less than face value.