Interest rates fell in the bond market Monday ahead of a parade of corporate earnings reports.
The profit levels and forecasts from companies will give investors important clues about the strength of the economy. The uncertainty about the outlook made some investors cautious and increased demand for safe investments.
Treasury prices rose and yields dropped as well because investors got a break from the flow of new debt entering the market. The Treasury Department last week auctioned $82 billion in debt. The next auctions aren’t for two weeks.
Quarterly reports are expected during the week from Bank of America Corp., General Electric Co., Intel Corp., Google Inc. and JPMorgan Chase & Co.
Guy LeBas, chief fixed income strategist at Janney Montgomery Scott, said there was concern over the start of earnings season but that some investors are also chasing returns after an increase in rates this month.
The yield on the 10-year Treasury note maturing in February 2020 fell to 3.85 percent in late trading from 3.88 percent Friday, while its price rose 9/32 to 98 6/32. The 10-year yield is linked to interest rates on mortgages and other consumer loans.
The stock market logged modest gains. The Dow Jones industrials rose about 9 points to close above the 11,000 mark for the first time in a year and a half.
In other trading, the yield on 30-year bond that matures in February 2040 fell to 4.70 percent from 4.74 percent. Its price rose 19/32 to 98 28/32.
The yield on the two-year note that matures in March 2012 fell to 1.05 percent from 1.07 percent, while its price rose 1/32 to 99 29/32.
The yield on the three-month T-bill that matures July 8 was flat at 0.15 percent. Its discount rate stood at 0.16 percent.