CREDIT : Bond Prices Turn Mixed in Thin Trading

Bond prices finished mixed Thursday, with longer-term issues declining slightly and shorter-term bonds edging higher.

The Treasury’s key 30-year bond dipped about 1/8 point, or $1.25 for every $1,000 in face value. Its yield, which moves inversely to its price, rose to 8.92% from 8.90% late Wednesday.

Traders didn’t attach great significance to Thursday’s activity, since the market’s ranks were drastically thinned by the approaching Christmas holiday. Trading ended several hours earlier than normal.

Bond prices had risen slightly earlier in the trading session, buoyed by a small decline in oil prices.

Bond prices have followed the movement of oil prices through much of this week. Rising oil prices are an enemy of the bond market, since they often signal inflationary pressures, which erode the value of fixed-income securities.

In the secondary market for Treasury bonds, prices of short-term government issues finished 1/32 point lower to 7/32 point higher, intermediate maturities declined 1/16 point to 5/32 point and long-term issues slipped 1/16 point, according to Telerate Inc., a financial information service.

The movement of a point equals 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, edged down 0.06 at 110.48. The Shearson Lehman daily Treasury bond index, which makes a similar measurement, was up 0.19, however, at 1,156.84.

Yields on three-month Treasury bills, meanwhile, fell 3 basis points to 5.72%. Six-month bills slipped 1 point to 6.40%, while one-year bills were unchanged at 6.68%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, was quoted at 6.75%, up from 6.687% late Wednesday.