By Cordell Eddings May 19 (Bloomberg) -- Treasury 10-year note yields were near the lowest level this year as global stocks dropped on concern Europe will further regulate financial markets, damping investor appetite for higher-yielding assets. U.S. government securities fell earlier even as a report showed U.S. consumer prices unexpectedly slipped in April. Treasury yields have tumbled this month on concern Greece’s debt crisis would slow global economic growth. “The market is still hostage to the equity market and the information coming out of Europe,” said Paul Horrmann, a broker in New York at Tradition Asiel Securities Inc., an interdealer broker. “The flight-to-quality trade is still on due to the massive uncertainties out of the euro zone. There is still fear out there, and no huge reason to feel optimistic.” The yield on the benchmark 10-year note rose less than 1 basis point, or 0.01 percentage point, to 3.35 percent at 10:53 a.m. in New York, according to BGCantor Market Data. The two- year note yield increased 2 basis points to 0.74 percent. Ten-year yields fell 14 basis points yesterday. They touched 3.26 percent on May 6, the lowest level since December. The consumer price index declined 0.1 percent last month, the first decrease since March 2009, figures from the Labor Department showed today in Washington. Excluding food and fuel, the so-called core rate was unchanged, capping the smallest 12- month gain in four decades. The Standard & Poor’s 500 Index dropped as much as 1.4 percent. The MSCI World Index slid 1.4 percent. The euro rose from a four-year low against the greenback amid speculation European leaders may announce steps to support the common currency. To contact the reporter on this story: Cordell Eddings in New York at ceddings@bloomberg.net

Source