- The Washington Times - Tuesday, April 21, 2009

NEW YORK (AP) - Treasurys retreated Tuesday after investors regained some confidence about banks.

Treasury Secretary Timothy Geithner said the “vast majority” of banks have sufficient capital. The stock market rose, luring investors out of safer assets such as government debt. Market participants have been nervous about the results of the government’s “stress tests” due on May 4.

Limiting the Treasury selling, however, was the Federal Reserve’s purchase of $7 billion in Treasurys. The Fed has been buying government debt to help keep rates from rising now that it has slashed target interest rates to nearly zero.

The benchmark 10-year Treasury note fell 12/32 to 98 22/32. Its yield rose to 2.90 percent from 2.84 percent late Monday.

The 30-year bond fell 26/32 to 95 21/32, and its yield rose to 3.74 percent from 3.69 percent.

The two-year note fell 1/32 to 99 28/32, and its yield rose to 0.94 percent from 0.92 percent.

The yield on the three-month Treasury bill edged up to 0.13 percent from 0.12 percent. The discount rate was 0.14 percent.

The cost of borrowing between banks was flat. The London Interbank Offered Rate, or Libor, on three-month loans in dollars stayed at 1.10 percent. The three-month dollar rate is near the all-time low of 1.08 percent it reached in January.

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