- The Washington Times - Friday, March 13, 2009

NEW YORK (AP) - Treasury prices ended mixed Friday, with 30-year bonds falling after China expressed concern about holding U.S. debt.

Treasurys held up decently this week despite the big rise in the stock market. Typically government debt is regarded as an alternative to stocks. But strong reception this week to U.S. debt auctions indicated to investors that demand for Treasurys remains high.

The U.S. government, selling debt at a record pace to fund its economic and financial rescue efforts, auctioned $63 billion this week in long-term government securities.

Some skepticism returned, however, when Chinese Premier Wen Jiabao expressed concern Friday about its massive holdings of Treasurys and other U.S. debt. Beijing, he noted, is the biggest foreign creditor to the United States.

“We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried,” Wen said at a news conference following the closing of China’s annual legislative session. “I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets.”

As the Dow Jone industrial average rose 54 points, the benchmark 10-year Treasury note fell 8/32 to 98 24/32. Its yield rose to 2.90 percent from 2.89 percent late Thursday. Prices move opposite yields.

The two-year note rose 3/32 to 99 26/32, and its yield fell to 0.97 percent from 1.01 percent.

The 30-year bond fell 1 5/32 to 96 25/32, and its yield rose to 3.68 percent from 3.61 percent.

The yield on the safe-haven three-month Treasury bill was unchanged at 0.20 percent. The discount rate was 0.21 percent.

The cost of lending between banks was flat. The British Bankers’ Association said the London Interbank Offered Rate, or Libor, on three-month loans in dollars remained at 1.32 percent. Libor is down significantly from its peak last fall, but up from its mid-January low of 1.08 percent.

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