CREDIT : Bonds Get Lift From Rise in Dollar, Economic News

Bond prices advanced Monday as the dollar strengthened and new government reports indicated slower-than-expected economic growth.

The Treasury’s bellwether 30-year bond rose 14/32 point, or nearly $5 for every $1,000 in face value, as its yield slipped to 8.89% from 8.93% late Friday.

Meanwhile, in Monday’s Treasury auction, interest rates on short-term securities rose from a week ago to the highest levels in four weeks.

The Treasury Department sold $6.4 billion in three-month bills at an average discount rate of 6.01%, up from 5.74% last week. Another $6.4 billion was sold in six-month bills at an average discount rate of 6.33%, up from 6.24% last week.

The rates were the highest since Oct. 19, when three-month bills sold for 6.84% and six-month bills averaged 7.21%.

In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable-rate home mortgages, rose to 6.96% last week after averaging 6.87% the week before.

Maria F. Ramirez, a managing director for Drexel Burnham Lambert, said a stronger dollar helped bond prices, calming fears about inflation and worries that the currency’s recent decline would discourage foreign investors from buying or holding dollar-denominated securities.

The dollar finished higher Monday against most major currencies in trading in New York.

Ramirez said the bond market also took some encouragement from government reports that U.S. industrial production rose 0.6% in October while business sales rose 1.0% in September.