Bonds higher after jobs data disappoint
Investors flock to safety after report says 467,000 jobs were cut in June, much worse than expected.
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| Click the chart to view bond prices and yields. |
NEW YORK (CNNMoney.com) -- Bond prices turned higher Thursday after June job losses in a government report were much worse than expected, shaking recovery hopes.
The Labor Department said the nation shed 467,000 jobs in June, compared with 322,000 in May. That's first time in four months that the number of jobs lost rose from the prior month, and the cuts were far worse than the 365,000 expected.
Economic confidence leads investors to take on riskier stocks, while fear drives them to safe-haven bonds. Stocks and bonds have mostly traded in opposite directions during the recession. Stocks tumbled Thursday, with the Dow Jones industrial average sinking 212 points.
A separate survey showed the unemployment rate rose for the ninth straight month, climbing to 9.5% from 9.4%. Economists expected the rate to hit 9.6%.
In another report, the government said initial claims fell to 614,000 from 630,000. Economists expected 615,000 new claims.
Thursday, the Treasury announced the size of a slew of upcoming auctions. Monday, the government will sell $8 billion in 10-year TIPS, or inflation-protected notes. Tuesday, the Treasury will auction off $35 billion in 3-year notes. Wednesday, $19 billion in reopened 10-year notes go on the blocks and Thursday, $11 billion in reopened $30-year notes go up for sale.
All financial markets are closed Friday for the Independence Day weekend.
Bond prices: The benchmark 10-year note jumped 10/32 to 96-29/32, and its yield edged lower to 3.50%. Bond prices and yields move in different directions.
The 30-year bond ticked up 4/32 to 98-24/32 and yielded 4.34%.
The 2-year note rose 4/32 to 100-9/32 and its yield was 0.99%. The 3-month bill dipped to 0.16% from 0.17%.
Lending rates: In a continuing sign of improved credit conditions, bank-to-bank lending rates remained near record lows.
The three-month Libor held at 0.58%, according to Dow Jones. The overnight Libor rate stayed at 0.27%, according to Bloomberg.com.
The London Interbank Offered Rate -- or Libor -- is a daily average of rates that 16 different banks charge each other to lend money, and is used to calculate adjustable-rate mortgages. More than $350 trillion in assets are tied to Libor.
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