Bond prices climb on weak retail sales report; Chrysler issues rebound on takeover bid doubts
NEW YORK -- Bonds posted solid price gains, as investors departed for the long holiday weekend with evidence that consumer spending ended the first quarter on a weak note.</br></br>Meanwhile, Chrysler Corp. bonds rebounded. Prices of the auto maker's bonds had fallen Wednesday on news of financier Kirk Kerkorian's takeover bid. But bond traders yesterday cited growing skepticism in the market that Mr. Kerkorian's bid for Chrysler would succeed.</br></br>Trading ended early ahead of the Easter and Passover holiday. In late activity, the price of the benchmark 30-year Treasury bond was up nearly 1/4 point, or nearly $2.50 for a bond with $1,000 face value, at 103 14/32. Its yield stood at 7.33%.</br></br>The Commerce Department said retail sales rose 0.2% in March, well below the 0.5% increase many economists had expected. Also, the department revised February retail sales to a decline of 1% from an initially reported drop of 0.4%.</br></br>Investors embraced the news as further evidence that the economy continues to lose steam and that inflation will remain well-contained, so that the Federal Reserve isn't as likely to raise interest rates in the near future. "More and more people are becoming convinced that inflation isn't a threat and that the economy is slowing," said James K. Ho, portfolio manager for John Hancock Mutual Funds, Boston.