CREDIT : Bond Prices Fall on Employment News

Bond prices fell Friday as the government reported stronger than expected employment growth following the stock market’s mid-October crash.

The bellwether 30-year Treasury issue fell nearly a full point, or $10 for every $1,000 in face value, as its yield edged up to 9.13% from 9.05% late Thursday.

For the week, the long bond’s yield fell from 9.18% a week earlier.

As trading got under way, the Labor Department reported that the nation’s unemployment rate fell to a decade-low 5.9% in November from 6% in October.

It said non-farm business payrolls rose by about 275,000 in November.

William V. Sullivan Jr., director of money-market research at the investment firm Dean Witter Reynolds, said the employment growth was stronger than many economists had expected.

He said many economists had been looking for slower job growth in the wake of the stock price collapse, which sent the Dow Jones industrial average down a record 508 points on Oct. 19.

But the employment data “suggested that hiring practices weren’t hurt by the stock downturn,” Sullivan said.

The net effect, he said, is that the economy appears to have “remained resilient in the face of all the financial turmoil we have been through.”

A strong economy is a negative development for bond prices because it usually sparks inflationary pressures and greater demand for credit.

Merrill Lynch Index Down

In the secondary market for Treasury bonds, prices of short-term governments fell 1/8 point, intermediate maturities fell by between 3/8 point and 5/8 point and 20-year issues 3/4 point, according to Telerate Inc., a financial information service.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.29 to 109.88.

The Shearson Lehman daily Treasury bond index, which makes a similar measurement, fell 4.04 to 1,149.56.

Yields on three-month Treasury bills rose 1 basis point to 5.44%. A basis point is one-hundredth of a percentage point. Six-month bills rose 12 basis points to 6.22% and one-year bills climbed 11 basis points to 6.59%.

Corporate bond figures were unavailable.

The federal funds rate, the interest on overnight loans between banks, traded late in the day at 6.75%, down from 6.875% late Thursday.

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