Bond Prices Wind Up Little Changed As Early Small Declines Are Reversed
NEW YORK -- Bond prices staged a mild rally yesterday afternoon, erasing small declines earlier in the day, and wound up little changed from Tuesday.</br></br>The rebound came despite a rise in oil prices and a $405 million bond sale by Chrysler Corp.'s pension fund. Traders said the Chrysler move had been widely anticipated, and thus its impact was muted.</br></br>Trading volume was light once again amid apprehension among investment managers about government economic reports to be released today and tomorrow. The reports are expected to show further signs of economic strength, which many analysts say could reduce the chances for further declines in interest rates.</br></br>The Commerce Department this morning will release retail sales figures for February. Many analysts expect a vigorous increase of about 2.5% to 3%, following January's sharp drop of 5.8%. The Federal Reserve Board tomorrow is expected to report that industrial production rose about 0.7% last month after a 0.4% rise in January. Also tomorrow, the Labor Department will release its producer price index. Analysts predict the index rose about 0.4%, following a 0.6% increase in January.</br></br>But even if the economy may be accelerating, some forecasters argue that interest rates aren't likely to change much in coming months. They contend that inflation will remain moderate and that the Federal Reserve will conclude it doesn't need to tighten or loosen credit policy. Moreover, money supply figures to be released this afternoon are expected to show little or no growth last month.