MW: Two-year Treasury yields reach lowest since 2003 as stocks fall
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasurys gained Wednesday as continued fears about the outlook for the economy weighed on equities and increased the appeal of government debt.
Two-year note yields fell 4 basis points, or 0.04%, to 1.21%, the lowest since 2003. Bond yields move in the opposite direction as prices.
Bond markets were mostly closed Tuesday for Veterans Day.
"Weakness in stocks worldwide both yesterday and today are leading to higher bond prices," said Andrew Brenner, co-head of structured products and emerging markets at MF Global.
The Dow Jones Industrial Average fell 176 points on Tuesday as outlooks from luxury home builder Toll Brothers Inc. and coffee retailer Starbucks Corp. illustrated softening consumer spending.
Having the big 3 U.S. automakers -- General Motors, Ford Motors and Chrysler -- on the brink of failure also worried investors, pushing U.S. equity futures lower, even as Democrat leaders say they will push legislation to use the $700 billion bailout fund to rescue them. See Indications.
Treasury Secretary Henry Paulson is due to give an update on the financial rescue package at 10:30 a.m. Eastern.
Gains in 10-year notes may be limited ahead of the Treasury Department's auction of a record $20 billion of the securities, with bids due at 1 p.m. Eastern.
Yields on the benchmark security fell 5 basis points to 3.73%.
