CREDIT : Jobless Report Boosts Bonds

Bond prices jumped higher Friday in moderate trading, capping a four-day trading week in which they posted vigorous advances.

Analysts said bond prices were boosted in Friday’s session by a new government report showing a modest rise in U.S. unemployment in May, which was reassuring for the outlook for inflation. The gains also reflected a perception in the market that the Federal Reserve was keeping its credit policy stable, judging from its operations in the open market, traders said.

The Treasury’s closely watched 30-year bond surged about a point, or $10 for every $1,000 in face value. Its yield, which moves inversely to its price, dropped to 9.04% from 9.14% late Thursday--its lowest level since late April.

The yield on the 30-year issue has tumbled from 9.31% last Friday, before the Memorial Day holiday.

In the secondary market for Treasury bonds, prices of short-term government issues ranged from 7/32 point to 3/8 point higher, intermediate maturities advanced 15/32 point to 25/32 point, and long-term issues jumped 11/16 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 Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.52 to 109.68. The Shearson Lehman Hutton daily Treasury bond index, which makes a similar measurement, stood at 1,147.94, up 5.63.

In corporate trading, industrials rose 3/4 point and utilities advanced 5/8 point in light trading, according to the investment firm Salomon Bros.

In the tax-exempt market, the bond buyer index of 40 actively traded municipal bonds was up 1/8 point at 88. The average yield declined to 8.13% from 8.14% late Thursday.

Yields on three-month Treasury bills, meanwhile, edged up 2 basis points to 6.45%. Six-month bills tumbled 9 basis points to 6.71% and one-year bills fell 6 basis points to 7.01%.

The federal funds rate, the interest on overnight loans between banks, was quoted late in the day at 7.25%, down from 7.375% late Thursday.