Periods of Selling Drive Bonds Moderately Lower As Investors Remain Uncertain over U.S. Growth
NEW YORK -- Bouts of selling drove the bond market moderately lower, but not out of its recent trading range.</br></br>Remarks this week by Federal Reserve Chairman Alan Greenspan had a lingering effect, as investors grapple with uncertain prospects for U.S. growth and monetary policy. "People love to sell markets when that happens," said Dennis Hynes, managing director at R.W. Pressprich & Co. However, "there's been no real damage to the market," he added.</br></br>In yesterday's trading, the price of the benchmark 30-year Treasury bond was down 15/32 point, or $4.6875, for each $1,000 in face value, to 102 10/32. Its yield, which moves in the opposite direction of its price, rose to 5.948% from 5.915%.</br></br>Treasurys traded lower early in the session as a decline in bond futures pulled the entire Treasurys market lower. Although prices recovered somewhat by afternoon, they never climbed into positive territory.</br></br>Traders said Treasurys later faced pressure as Cummins Engine Co. sold a $765 million offering. Large new corporatedebt issues can affect Treasurys for various reasons; among them, underwriters of corporate issues often sell Treasurys to hedge against broad market declines during the underwriting process.