06/25 23:48
U.S. Treasuries Soar After WorldCom
Restates Profit, Sacks CFO
By Chris Cooper
Tokyo, June 26 (Bloomberg) -- U.S. Treasuries rallied,
pushing 10-year yields down by their biggest amount this
year, after WorldCom Inc. said it misstated earnings,
driving investors to dump stocks and seek the haven of
government debt.
Treasuries rallied after WorldCom Inc., the second-largest
U.S. long-distance provider, said it will restate earnings
and fired its chief financial officer, saying the company
misstated $3.9 billion in expenses. Nasdaq 100 Index
futures for September delivery dropped 49.5 points to
977.5.
``WorldCom is causing investors to question whether they
can really believe earnings statements, and that is leading
to a flight to quality,'' said Kazutoshi Nakade, who helps
oversee 200 billion yen ($1.66 billion) at Mitsui Sumitomo
Insurance Asset Management Co.
The 4 7/8 percent note maturing in 2012 gained 1 9/32, or
$12.81 per $1,000 face amount, to a price of 101 23/32. Its
yield fell 17 basis points to 4.65 percent, the biggest
decline since Nov. 29. One basis point equals 0.01 of a
percentage point.
Two-year notes, the most widely traded government
securities, also gained after the Treasury postponed this
month's auction of the debt, due later today, as it waits for
Congress to raise the $5.95 trillion cap on government
borrowing.
The 3 1/2 percent May 2004 note rose 11/32 to 101 4/32,
pushing its yield down 18 basis points to 2.65 percent. |
