CREDIT : Bond Prices Rise Slightly in Quiet Trading

Share via
Associated Press

Bond prices closed slightly higher in quiet trading Thursday, tracking the direction of the dollar in the absence of any news to influence the market.

The Treasury’s bellwether 30-year bond was up 3/16 point, or about $1.87 for every $1,000 in face value. Its yield--often an indicator of interest rate trends--slipped to 9.40% from late Wednesday’s 9.41%.

William V. Sullivan, director of money research for the investment firm Dean Witter Reynolds Inc., said that with no new economic news, the bond market followed the path of the dollar, declining and then recovering during the course of the day.


“The market has been strongly influenced by economic data,” Sullivan said. “Today there was no economic data, so it took its cue from the foreign exchange markets.”

Traders were looking ahead to today’s report on the federal budget deficit for July, with analysts’ projections running about $23 billion. Also today, the Federal Reserve is scheduled to release the minutes of the July meeting of the Federal Open Market Committee, its main policy-making arm.

Funds Rate Up

Prices of short-term government issues were unchanged; intermediate maturities ranged 1/32 point to 3/32 point higher, and 20-year issues picked up 7/32 point, according to Telerate Inc., a financial information service.

The movement of a point is equivalent to a change of $10 in the price of a $1,000 bond.

The Shearson Lehman daily Treasury bond index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, edged up 0.44 to 1,124.84.

Corporate bonds improved slightly. Moody’s investment grade corporate bond index, which measures price movements on 80 corporate bonds with maturities of five years or longer, was up 0.45 at 281.17.

Municipal bonds also rose. The Bond Buyer index was up 4/32 point to 88-14/32, with yields falling to 8.16% from 8.18%.


Three-month Treasury bills, meanwhile, were unchanged at a discounted rate of 7% and a yield of 7.22%. Six-month bills were unchanged at a discounted rate of 7.52% to yield 7.92%, while one-year bills slipped 1 basis point to 7.67% and a yield of 8.23%.

A basis point is one-hundredth of a percentage point. The yield is the annualized return on an investment in a Treasury bill. The discounted rate is the interest rate the market uses to price bills.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8.18%, up from 8% late Wednesday.

Tables, Page 9