- The Washington Times - Thursday, April 2, 2009

NEW YORK (AP) - Treasury prices fell Thursday as stocks extended their rally and lured investors away from the safety of government debt.

Investors exited Treasurys as world leaders met in London to fight the global financial crisis, and an accounting rule change arrived that should help banks pare losses.

The investment trend toward stocks continued even as the Labor Department reported a jump in initial jobless claims to a 26-year high. On Friday, the Labor Department releases its March report on payrolls and the unemployment rate.

As the Dow Jones industrials rallied 216 points, the benchmark 10-year Treasury note fell 29/32 to 99 29/32. Its yield rose to 2.76 percent from 2.66 percent late Wednesday. Prices move opposite to yields.

The 30-year bond fell 1 12/32 to 98 17/32, and its yield rose to 3.58 percent from 3.52 percent, according to BGCantor Market Data.

The two-year note fell 4/32 to 99 31/32 and its yield rose to 0.88 percent from 0.81 percent.

The yield on the three-month Treasury bill, considered a safe place to park money when the market outlook is uncertain, slipped to 0.20 percent from 0.21 late Wednesday. The discount rate was 0.21 percent.

The cost of borrowing between banks eased. The British Bankers’ Association said the London Interbank Offered Rate, or Libor, on three-month loans in dollars fell to 1.18 percent Thursday from 1.19 percent Wednesday.

Meanwhile Thursday, the Federal Reserve bought $7.5 billion in Treasury securities, after buying $6 billion the day before. The central bank in March started purchasing government debt in an effort to bring down interest rates.

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