MW: Treasurys gain as equity drop spurs safe-haven buying
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) - Short-term Treasury notes gained Friday, sending yields down for the first day in four, as losses in U.S. equity markets increased the appeal of the relative safety of government debt.
Two-year note yield fell 2 basis points, or 0.02% to 1.51%.
Treasurys pared losses as U.S. equities extended Thursday's plunge, with the Dow Jones Industrial Average losing about 600 points.
Rates on three-month treasury bills, one of the shortest-term securities available and often sought as a refuge in times of turmoil, dropped 28 basis points to 0.25%.
Some traders also expressed anxiety surrounding the settlement of credit-default swaps related to the demise of Lehman Brothers , expected Friday.
Longer-term debt yields remained higher amid concern that the government's continued initiatives to stabilize the flailing financial system will lead to more debt issuance, reducing the value of holding bonds.
Ten-year note yields rose 4 basis points to 3.84%.
The Securities and Financial Market Association recommends bond trading close at 2 p.m. Eastern Friday and remain closed Monday for Columbus Day.
