MW: Treasurys gain as retail sales worse than feared
Treasury prices rose on Wednesday, pushing yields to the lowest this year, after a government report said retail sales dropped 2.7% in December, far more than expected.
Ten-year note yields ) slid for a sixth day, down 11 basis points, or 0.11%, to 2.18%.
Two-year note yields ) declined 5 basis points to 0.70%, the lowest since Dec. 18.
Economists surveyed by MarketWatch forecast sales would decline 1.5% last month.
Excluding autos, sales fell 3.1%, their biggest drop since record-keeping began in the early 1990s and compared to an anticipated 1.6% decline. See retail sales story.
"This is what the worst of an economic downturn looks like," said T.J. Marta, fixed-income strategist at RBC Capital Markets. "We are at the stage where the data prints - and negative surprises - are the worst."
A separate report showed import prices fell 4.2% last month, mostly due to oil prices.
Still coming, the Federal Reserve is expected to release its so-called Beige Book at 2 p.m. Eastern time. The report is a compilation of anecdotes about the economy from around the country, for policymakers to reference at their next meeting is on Jan. 27 - 28.
Other nations losing favor
U.S. government debt may also be gaining favor as the credit rating of other nations' debt face downgrades.
Greece saw its key sovereign credit rating cut by Standard & Poor's on Wednesday, downgrading the debt to A- from A. See full story.
S&P also put Portugal on negative credit watch Tuesday due to high government debt levels, and put AAA-rated Spain on notice Monday.
