CREDIT : Bond Prices Down as Reports Point to Growth in Economy

Bond prices tumbled Wednesday, pressured by the publication of government reports indicating growth in the economy.

The Treasury’s closely watched 30-year bond dropped a full point, or $10 for every $1,000 in face amount. Its yield, which moves inversely to its price, jumped from 8.51% late Tuesday to 8.60%--its highest level since the end of January.

The market continued to be jittery in advance of today’s scheduled report on the U.S. merchandise trade balance for January.

The Commerce Department reported Wednesday that housing construction climbed 8.9% in February, the biggest rise in more than a year. The increase had followed declines of 1.9% in January and 15.8% in December.

The Federal Reserve said industrial production edged up 0.2% in February, the fifth consecutive monthly gain.

Analysts said both reports indicated that the economy is growing and ease fears of a possible recession prompted by the Oct. 19 stock market crash.

“They showed a little bit more strength than people expected,” said Elizabeth Reiners, a vice president of Dean Witter Reynolds Inc.

Yields on three-month Treasury bills, meanwhile, were unchanged at 5.61%. Six-month bills rose 5 basis points to 5.80% and one-year bills were also up 5 basis points, at 6.26%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, was quoted late in the day at 6.375%, down from 6.50% Tuesday.

Tables, Page 14