MW: Asian markets mostly down as commodity stocks drop
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasury prices fell slightly Monday, nudging up yields, as commercial lender CIT Group reportedly received a private-sector bailout, sending stock futures higher on Wall Street and reducing the demand for the relative safety of U.S. fixed income.
Ten-year note yields (UST10Y 3.64, +0.08, +2.19%) rose 2 basis points to 3.67%.
A basis point is one one-hundredth of a percentage point. Bond prices move inversely to their yields.
Yields on the benchmark 10-year note reached as high as 3.72% in overseas trading hours, before stocks pared gains.
Yields on 2-year notes (UST2YR 0.99, +0.02, +1.64%) were off 1 basis point to stand at 1%.
The Wall Street Journal reported that CIT (CIT 1.28, +0.58, +82.86%) has reached a $3 billion rescue-financing agreement with key bondholders that will allow the business lender to avoid bankruptcy and restructure outside court. See more on CIT rescue.
"The main catalyst for the Treasury sell-off was the CIT news, which sent stocks soaring," said Roseanne Briggen, analyst at Informa Global Markets. U.S. stock futures have since come off their best levels, but they remained comfortably higher. See Indications.
At 10 a.m. Eastern time, the Conference Board will release its index of leading economic indicators for June. Economists expect the index to rise 0.5%, after having jumped 1.2% in May. See Economic Preview.
With little economic data this week, analysts will key in on comments from Federal Reserve chief Ben Bernanke when he testifies before Congress starting Tuesday, with speculation that he may discuss ways to wind down the many programs initiated over the last year to support the economy and financial markets. See related story.
"Many analysts are expecting Bernanke to begin talking about exit-plan strategies for the Fed's massive expansion into credit and capital markets in the past several quarters," said T.J. Marta, chief strategist at Marta on the Markets.
Bernanke may skirt that precise topic but discuss other things that need to be done such as financing the federal deficit, recapitalizing the banking system and improving the regulatory system, Marta said.
