By Laura Mandaro, MarketWatch
SAN FRANCISCO (MarketWatch) — Treasury prices rose Monday, sending yields lower, as Ireland’s weekend agreement on a bailout sparked new concerns about what the lending package’s impact would be on the government balance sheet.
Yields on the 10-year Treasury notes (UST10Y 2.82, -0.05, -1.84%) fell 5 basis points to 2.82%. Prices move inversely to yields; a basis point is equal to 1/100th of a percentage point.
Yields on two-year notes (UST2YR 0.51, 0.00, 0.00%) were flat at 0.51%.
U.S. stocks opened lower, with the Dow Jones Industrial Average (DJIA 11,178, -25.73, -0.23%) off 52 points at 11,151.
“The excitement over the weekend ... has been treated as something rather anticlimactic,” wrote David Ader and Ian Lyngen, government bond strategists at CRT Capital Group LLC.
On Sunday, Ireland applied for help from the International Monetary Fund and the European Union to help its struggling bank sector. Economists expect the aid to amount to 80 billion to 90 billion euros.
After initially giving European stocks and the euro a lift, sentiment about the package soured. Moody’s Investors Service warned of a likely “multi-notch” downgrade to Ireland’s Aa2 credit rating from the shift of bank debt on the government’s balance sheet. Read more on Ireland's bailout and market reaction.
U.S. government bonds often rally when investors seek a safe haven for their money.
Later Monday, the Treasury will announce the results from the first of three note sales for the week. The U.S. is selling $35 billion in two-year notes, part of $99 billion in all expected to be sold this week.
Prices fell and yields rose on 10-year note yields last week, the culmination of several volatile trading days.
