CREDIT : Bond Prices Fall in Quiet, Uneasy Trading

Bond prices fell Tuesday in a quiet session marked by nervousness about whether a forthcoming government report would indicate that the economy is overheating.

The Treasury’s closely watched 30-year issue fell 17/32 point, or about $5.30 for every $1,000 in face value. Its yield, which moves inversely to its price, rose to 9.13% from 9.08% late Monday.

The market failed to respond favorably to a sharp drop in oil futures prices early in the session. Oil prices later rebounded, finishing the day only slightly below Monday’s levels.

In the absence of major economic reports this week, traders were looking ahead to the September unemployment report scheduled for release Oct. 7. Strong employment gains could signal rising inflation, which hurts fixed-income securities.

“The market is concentrating on anything it can grab, and it’s just scaring itself to death,” said Jay Goldinger, an investment banker at Cantor, Fitzgerald & Co. in Beverly Hills.

A big drop in gold prices in recent weeks, which would ordinarily cheer up the bond market, has failed to have much effect. Gold prices rose Tuesday but remained below $400 an ounce.

In the secondary market for Treasury bonds, prices of short-term government issues fell 1/16 point to 3/16 point, intermediate maturities fell 3/16 point to 5/16 point and 20-year issues were 7/16 point lower, according to Telerate Inc., a financial information service.

The federal funds rate, the interest on overnight loans between banks, was quoted at 8.25%, down from 8.313% late Monday.