Bond Prices Retreat Slightly as Some Investors Become Less Bullish on Latest Economic Signals
NEW YORK -- The bullish convictions of some bond investors slipped a bit yesterday and prices on most Treasury issues fell in light selling.</br></br>The benchmark 30-year Treasury issue fell nearly 1/4 point, or nearly $2.50 for each $1,000 face amount, taking the yield up to 8.06%.</br></br>Traders said more and more investors are weighing recent economic reports and are coming to the view that the Federal Reserve may not reduce interest rates anytime soon. However, bond investors are largely waiting for this Friday's August employment report before arriving at any conclusions about the current strength of the U.S. economy.</br></br>Most trading activity occurred in the morning. Dealers found few buyers to take bonds off the hands of profit-takers and nervous bulls, and so prices were marked down. By noon, trading slowed to a crawl as hundreds of traders and investors in the government bond market tuned into the live broadcast of Congressional hearings over the Salomon Treasury auction scandal.</br></br>No hearings are scheduled for today, however, and the market's attention is likely to swing back to economic fundamentals. One group of investors that has turned negative on the bond market recently are asset allocators, who juggle investments between stocks, bonds and cash in search of high returns with moderate risks.