BLBG: Treasury Yields Advance From 1-Year Low as U.S. Stocks Recover
By Cordell Eddings and Susanne Walker
May 21 (Bloomberg) -- Treasuries pared gains as U.S. stocks erased losses and rose on speculation the rout in higher- yielding assets has overshot the potential damage from Europe’s sovereign-debt crisis.
U.S. 10-year note yields earlier dropped to the lowest level in a year as Europe’s crisis spurred an exodus from riskier assets into the safest government securities. Treasuries were still headed for a weekly gain.
“We’ve had a massive flight to quality, and there is speculation that fears from the euro zone may be a bit overblown at the levels the market is currently reflecting,” said Guy Lebas, chief fixed-income strategist and economist at Janney Montgomery Scott LLC in Philadelphia. “We have moved very far very fast. The market is trading on technicals rather than fundamentals.”
The yield on the 10-year note fell 5 basis points, or 0.05 percentage point, to 3.17 percent at 10:16 a.m. in New York, according to BGCantor Market Data. The 3.5 percent security maturing in May 2020 rose 13/32, or $4.06 per $1,000 face amount, to 102 25/32.
Ten-year yields, a benchmark for consumer and company borrowing costs, earlier dropped to as low as 3.10 percent, the least since May 18, 2009. The yield on the 30-year bond decreased 3 basis points to 4.06 percent after touching 3.98 percent, the lowest since October.
The Standard & Poor’s 500 Index gained 0.3 percent after falling as much as 1.5 percent.
To contact the reporters on this story: Cordell Eddings in New York at ceddings@bloomberg.net; Susanne Walker in New York at swalker33@bloomberg.net
