Strong Economic-Data Reports for November Renew Fears of Further Interest-Rate Increases
NEW YORK -- Bonds suffered their worst one-day plunge in more than four months as newly released data sparked concerns that the economy's continued head-turning growth will cause the Federal Reserve to raise interest rates at least once next year to keep inflation under wraps.</br></br>In late trading, the bellwether 30-year Treasury fell 1 11/32, or $13.438 for a bond with $1,000 face value, to 97 17/32. The bond's yield, which moves in the opposite direction of its price, rose to 6.295%. It was the benchmark bond's worst one-day performance since Aug. 6.</br></br>Shorter-term securities also dropped. Two-year notes, for example, fell 6/32 to yield 6.045%. Volume was $49.4 billion, higher than the average of the last week and last 30 days, according to GovPX Inc., which tracks trading volume at five of the six interdealer brokers.</br></br>Investors were spooked by a stronger-than-expected retail-sales report for November. The Commerce Department said retail sales jumped 0.9%, above the 0.5% increase economists expected. Excluding autos, however, sales were up 0.4%, in line with forecasts.</br></br>In addition, October sales were revised to show an overall increase of 0.3% from an unchanged reading in the initial report. As a result, what looked like slight slowing in consumer spending, and a possible precursor to a slowing economy, instead showed the economy may be overheating.