Lower Prices on RJR Bonds Hurt Market

Bond prices sank, weighed down by worries that interest rates may have to move higher to attract bidders to the government’s impending auction of new securities next month.

Another sharp decline in the prices of RJR Nabisco bonds added to the market’s nervous tenor.

The Treasury’s benchmark 30-year bond fell 5/8 point, or about $6.25 for every $1,000 in face value. Its yield rose to 8.57% from 8.51% late Friday.

In the market for high-yielding junk bonds, prices of RJR Nabisco securities took another tumble in heavy dealings. Traders said prices of various RJR issues dropped by between $30 and $70 for every $1,000 in face value on top of declines of between $50 and $80 per $1,000 in face value Friday.

The federal funds rate, the interest rate banks charge each other on overnight loans, was quoted at 8.25%, down from 8.813%.