Treasurys strengthen as Spain worries grow
SAN FRANCISCO (MarketWatch) -- Treasury prices rose on Friday as lackluster corporate earnings and worries about Spain's surging borrowing costs led investors to seek the safety of U.S. government debt. Strong appetite for bonds pushed 5-year bond yields to a record low during the session.
Yields on 10-year notes (10_YEAR) , which move inversely to prices, fell 5 basis points to 1.461%, extending its slide for a fourth week. A basis point is one one-hundredth of a percentage point.
Yields on 5-year debt (5_YEAR) slid 4 basis points to 0.580%, coming back from a record low of 0.573% earlier. For the week, 5-year bond yields are roughly down 6 basis points.
"This time it is about Spain, and the details aren't as important as the fact that this is going to be with us for a while," said Kevin Giddis, head of fixed-income capital markets at Raymond James/Morgan Keegan, in a commentary.
Spain's 10-year-government- bond yields surged well above the critical 7% level to trade at 7.22% (10YR_ESP) .
News that euro-zone finance ministers approved a financial-aid package for Spain's banking sector did nothing to relieve the pressure on the country's bonds.
"The fear trade in Spain is back on, with 10-year yields back comfortably over 7% and spreads to Germany at new highs, now approaching 600 basis points," wrote Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities, in his daily report.
Germany's 10-year-government-bond yields (10YR_GER) slid 5 basis points to 1.165%.
Treasurys are generally seen as a safe-haven investment and investors tend to buy them at times of heightened economic concerns.
Yields on 30-year bonds (30_YEAR) dropped 7 basis points to 2.551%, notching another weekly decline.
No major U.S. economic data were released on Friday.
U.S. stocks dropped after reports from
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