RPT - Treasurys close lower amid US growth revisions -
Thursday, September 30, 2004 10:42:36 PM
afxpress.com
(Repeating for technical reasons) CHICAGO (AFX) -- Treasurys wiped away early gains for prices to close lower for a third day after US economic data had some analysts raising their third-quarter growth forecasts
The market late Thursday stepped back from its steep decline, trimming losses as the price of oil climbed back above 50 usd a barrel
At the close, the benchmark 10-year note was off 7/32 to 100 1/32. Its yield, which moves in reverse of price, climbed to 4.12 pct from 4.09 pct at Wednesday's close
One analyst pointed to "technical selling", amid mixed economic reports
"The belief is that hedge funds are exiting their positions, resulting in stop-loss selling," said Maryann Hurley, a DA Davidson analyst
The recent woes surrounding mortgage giant Fannie Mae may also be linked to the selling of Treasurys, Hurley added
"The large upward revision to July consumption spending will, undoubtedly,generate a series of [gross domestic product] revisions today," said Greenwich Capital Markets analyst Steve Stanley, who revised upwards his projection to 4.7 pct from 4.3
"Look for upward revisions to current [third-quarter] GDP estimates. Our forecast remains at 4.5 pct," said Mat Johnson, an analyst at ThinkEquity
The Commerce Department said Thursday that a measure of consumer price inflation remained unchanged in August for a second month in a row, data that backs the Federal Reserve's view that inflation has eased from an energy-driven rise earlier this year
The personal consumption expenditure price index is up 2.1 pct in the past year, down from 2.4 pct in July. The core PCE index remained at 1.4 pct for the second straight month
In the same report, the government reported healthy wage growth boosted US personal incomes by 0.4 pct in August, while real and nominal consumer spending held flat and spending on durable goods sank
In a separate report, the Labor Department said initial jobless claims rose by 18,000 to 369,000 last week
In a related report, the Conference Board said its help-wanted advertising volumes were unchanged in August, with its help-wanted index remaining at 37
In the past three months, job advertising in major US newspapers has declined in all nine regions
"The labor market remains flat and is starting to sap consumer confidence," said Ken Goldstein, chief economist for the board
In the Midwest, the Chicago purchasing managers index rose to 61.3 from 57.3 in August. Orders climbed to 68.7, production slowed to 58.4, employment rose to 53.9 and prices slid to 86.4
The Chicago PMI data "suggests a small rise in the national index from to 60 from 59," said Ian Shepherdson, chief US economist for High Frequency Economics
"Great, but consumers are the problem, not industry ... yet," he added
At the New York Mercantile Exchange, oil futures headed back towards 50 usd per barrel as traders assessed the likelihood of more increases in US crude inventories and whether a ceasefire holds between militants and troops in Nigeria
The short end had the two-year note up 2/32, its yield down to 2.61 pct from 2.6 pct. The five-year maturity fell 5/32 to 100 even, its yield up to 3.38 pct from 3.36 pct Wednesday
The 30-year bond was off 13/32 at 107 5/32, its yield at 4.89 pct from 4.86 pct at the previous close |
