CREDIT : Bond Prices Finish Mixed; Market in Holding Pattern

Bond prices finished mixed Monday in lackluster trading, as many bond investors marked time before the release of key U.S. trade data scheduled for later this week.

The Treasury’s closely watched 30-year bond declined 1/8 point, or about $1.25 for every $1,000 in face amount. Its yield, which moves inversely to its price, edged up to 8.51% from 8.50% late Friday.

Shorter-term issues were mostly unchanged to slightly higher, while other long-term Treasury bonds posted small declines.

Analysts said the credit markets are in a holding pattern awaiting Thursday’s publication by the Commerce Department of the nation’s merchandise trade balance for January.

“It was a pretty dull day; the market’s just in a lull,” said Ward McCarthy, chief financial economist for Merrill Lynch Capital Markets. He noted that the market was unimpressed by Monday’s report that business inventories rose 0.4% in January, less than half the increase of the previous month.

“It just confirmed what we already knew,” McCarthy said.

In the secondary market for Treasury bonds, prices of short-term government issues were unchanged to 1/32 point higher, intermediate maturities were down 1/16 point to up 1/32 point and 20-year issues slipped 1/32 point, according to figures provided by 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 Shearson Lehman daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, edged down 0.16 to 1,181.67.

In corporate trading, industrial and utility issues were unchanged in light activity, according to the investment firm Salomon Bros.

In the municipal bond market, the bond buyer index of 40 actively traded general obligation and revenue bonds declined 1/8 point to 89.438. The average yield edged up to 8.05% from 8.04% late Friday.

Yields on three-month Treasury bills, meanwhile, declined 2 basis points to 5.71%. A basis point is one-hundredth of a percentage point. Six-month bills also lost 2 basis points, at 5.83%, while one-year bills slipped 1 basis point to 6.23%.

The federal funds rate, the interest on overnight loans between banks, was quoted at 6.675%, up from 6.563% late Friday.

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