Thursday, July 26, 2012

Treasury yields rise as investors return to stocks

The yield on the benchmark 10-year Treasury note rose Thursday as investors became more willing to risk putting money into the stock market.

Stocks soared after the European Central Bank president vowed to "do whatever it takes" to keep the continent's monetary union intact.

The yield on the 10-year Treasury note rose to 1.44 percent late Thursday. That was up from 1.40 percent the day before, though it's still extremely low by historical standards. On Tuesday the yield hit an all-time low of 1.39 percent.

The yield represents the interest rate the U.S. government has to pay to persuade investors to buy its debt. When investors are more confident about the economy, yields fall because investors take money out of safe-haven investments like government bonds and put it into riskier assets like stocks.

The price of the 10-year Treasury fell 34 cents for every $100 invested. The price moves inversely to the yield.

In other trading, the yield on the 30-year bond rose to 2.50 percent from 2.46 percent. The price fell $1 for every $100 invested.

The yield on the two-year note rose to 0.22 percent from 0.21 percent. The three-month T-bill's yield held steady at 0.10 percent.

Source: http://news.yahoo.com/treasury-yields-rise-investors-return-stocks-192923005--finance.html

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