CREDIT : Technical Factors Help Bond Prices Rebound

The credit markets ended another dull session with mostly higher bond prices Wednesday, although traders remained cautious as they awaited the release of key economic reports.

The Treasury’s 30-year bond, which in the last three sessions lost more than 2 points, or $20 per $1,000 in face amount, recovered about $2.50. Its yield slipped to 9.20% from 9.23% late Tuesday.

Traders attributed the rebound in bond prices largely to technical market factors. They said the market was likely to remain quiet for the rest of the year and until it obtains a clearer picture as to where the economy is headed.

The government is scheduled to release its October merchandise trade report today and its November retail sales and producer price data Friday.

In the secondary market for Treasury bonds, prices of short-term governments ranged from 1/32 point higher to 1/32 point lower; intermediate maturities were down 1/32 point to up 1/8 point, and 20-year issues rose 5/16 point, according to Telerate Inc., a financial data services firm.

In corporate trading, industrials rose 1/8 point, and utilities were unchanged in light trading, according to Salomon Bros.

Municipal bond prices were mixed in moderate trading, according to Merrill Lynch & Co.

Yields on three-month Treasury bills were up a basis point to 5.83%. Six-month bills rose two basis points at 6.41%, and one-year bills gained two basis points at 6.71%.

The federal funds rate, the interest on overnight loans between banks, traded late in the day at 6.75%, up from 6.833%.

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