MW: Treasurys gain as European-debt worries spread
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose for a second day on Wednesday, pushing yields down, as worries about which European country will follow Portugal in being downgraded sent investors fleeing stocks and the euro to the safe haven of U.S. debt and the dollar.
Yields on 10-year notes 10_YEAR -0.77% , which move inversely to prices, fell 4 basis points to 3.08%. A basis point is 1/100th of a percentage point.
Yields on 2-year notes 2_YEAR +0.94% slipped 2 basis points to 0.41% and 30-year-bond yields 30_YEAR -0.34% declined 2 basis points to 4.35%.
Moody’s decision on Tuesday to cut Portugal’s rating to junk status weighed not only on Portuguese debt but also on Italian, Irish and Spanish debt. And the move raised fears of another adverse turn in the euro zone’s long-running debt crisis.
Investors had been calmed in recent days after Greece averted default by passing controversial austerity measures. Read story on Portugal, European debt.
“Treasurys continued to grind higher overnight on a follow-through from yesterday’s Portugal downgrade and increased peripheral concerns,” said David Ader, head of government-bond strategy at CRT Capital Group
China’s surprise interest-rate hike during midday European trading also raised concerns that global growth may slow more sharply.
At 10 a.m. U.S. Eastern Time, bond traders will take a peek at the Institute for Supply Management’s index of the U.S. services sector. It’s one of the last major economic data points for the week before the Labor Department’s nonfarm-payrolls report for June is released on Friday.
Bond prices rose Tuesday, pushing yields down after a week of increases, aided by worries about European debt and Portugal’s downgrade. Read about Treasury bonds Tuesday.
