CREDIT : Bonds Edge Up in Light Turnover

Bond prices overcame some early weakness to finish with small gains Wednesday as traders looked toward an impending report on the nation’s trade balance.

The Treasury’s 30-year bond rose 1/8 point, or $1.25 per $1,000 in face amount, as its yield slipped to 8.73% from 8.75% late Tuesday.

Maury Harris, chief economist for the investment firm Paine Webber Inc., said trading was limited mostly to professional speculators rather than investors and was relatively light.

He said some traders were reluctant to take a large position in advance of today’s announcement of U.S. trade deficit figures for February.

The prices of some long-term Treasury issues initially declined as much as $5 for every $1,000 in face value after the government reported an 0.8% rise in retail sales in March, somewhat higher than many analysts had expected.

The report depressed bond prices because it suggested that the economy may be continuing to grow at a vigorous pace, raising concerns that inflation and interest rates could be headed higher to the detriment of bond prices.

But bond prices bounced back later in the day as commodity prices continued to fall, indicating that inflation may pose no imminent threat.

In the secondary market for Treasury bonds, prices of short-term issues rose 2/32 point, intermediates edged up 3/32 point and 20-year governments rose 7/32 points, according to the financial information service Telerate Inc.

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.13 to 111.76. The Shearson Lehman composite index, which makes a similar measurement, rose 1.27 to 1,169.03.

Yields on three-month Treasury bills fell 8 basis points to 5.83%. Six-month bills fell 4 basis points to 6.04% and one-year bills fell 4 basis points to 6.41%. A basis point is one-hundredth of a percentage point.

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

In the tax-exempt market, the Bond Buyers municipal bond index, which measures price changed of 40 long-term bonds, rose 6/32 point to 88 22/32 while its yield fell to 8.09% from 8.11%.

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