Business news with words department+prices+yield. 6 news.

SAN FRANCISCO (MarketWatch) -- Treasurys were slightly lower Monday, pushing up yields, as firm stock prices decreased the appeal of fixed-income assets in extremely thin pre-holiday trading. U.S. bond trading will end early on Monday, and overnight Japanese and German markets were closed Monday for holidays. "With the holiday-shortened week, our expectations for any paradigm shifting events are pretty light," said David Ader, U.S. government bond strategist at RBS Greenwich Capital. "With the bench players now in the field until the New Year, we would err on the side of limited conviction for any moves over the next few trading sessions." The benchmark 10-year Treasury note was down 7/32 at 100 12/32, with a yield of 4.2%. The 30-year bond was down 10/32 at 106 9/32 with a yield of 4.61%. The two-year note was down 2/32 at 99 26/32 with a yield of 3.21%. On Wednesday, the Treasury Department will sell $22 billion in two-year notes, and on Thursday, it will sell $13 billion in five-year notes.

THE difference in yield between Japanese and US 10-year bonds climbed last week to the widest in a month on signs inflation is a bigger threat in the United States than in Japan. The extra yield investors demand to hold Treasuries instead of Japanese notes climbed as high as 2.696 percentage points on Friday, after a Labor Department report showed the biggest increase in US producer prices in 34 years. Japan's bond yields rose less than US debt after confidence among the Asian nations' largest manufacturers slumped more than forecast, cementing speculation the Bank of Japan will delay raising interest rates. "JGBs are a better buy than Treasuries at the moment," Xinyi Lu, chief strategist at the international treasury division at Mizuho Corporate Bank Ltd in Tokyo, told Bloomberg News. "Nobody believes very firmly that there will be inflation here again." The yield on the 1.5-percent bond due December 2017 fell two basis points last week to 1.545 percent at

HOUSING prices in 70 major Chinese cities jumped by 10.5 percent in November, according to an official with the country's top economic planning body. The growth rate was the largest monthly rise since July 2005 when China started to cover more cities in its monthly housing price survey. From January to November, housing prices grew by 7.3 percent year on year, with the cost of new homes jumping 7.9 percent, Cao Changqing, director of the pricing department under the National Development and Reform Commission, said in an online interview. Rising property prices, driven up by speculation, have become a major concern for Chinese citizens. "Despite falling sales, housing prices in parts of Beijing, Shanghai, Guangzhou and Shenzhen still remain high," he said. Prices are expected to remain stable as macro-control policies are starting to yield results, Cao said. The government introduced a string of policies to cool off the red-hot real estate market.

THE biggest quarterly rally for US government securities in five years is getting an extraordinary boost from the burgeoning reinvestment of petrodollars by the Organization of Petroleum Exporting Countries. OPEC members increased their holdings of Treasuries 12 percent this year through July to US$123.8 billion, Treasury Department data show. The prospect that OPEC's share of US debt is growing is based on the 31 percent rise in oil since December, which will raise OPEC revenue four percent to US$630 billion this year and nine percent to US$688 billion in 2008, according to estimates by the US Department of Energy. Petroleum exporters are adding to holdings of US debt three times faster than other foreign investors, the Treasury data show. Yields on 10-year notes are 21 basis points lower because of the additional petrodollar reinvestment, New York-based consulting company McKinsey & Co said last week. "Oil revenues are up; they're still in dollars, and they have to be put to work," said David Ader, head of US government bond strategy in Greenwich, Connecticut, at RBS Greenwich Capital, one of the 21 primary dealers that underwrite US government debt. "It bodes well for US debt." Demand from oil exporters may help drive yields lower even as signs that the US economy is weathering the worst housing market in 16 years reduce investor expectations for lower interest rates. The chances that the Federal Reserve will lower its target rate for overnight loans between banks this month fell to 48 percent from 74 percent a week ago, based on prices at the Chicago Board of Trade. The yield on the benchmark 4 3/4 percent note due in August 2017 rose four basis points last week to 4.64 percent, according to New York-based bond broker Cantor Fitzgerald LP. The price, which moves inversely to the yield, fell 10/32, or US$3.13 per US$1,000 face amount, to 100 7/8. A basis point is 0.01 percentage point. The note was little changed at 4.63 percent yesterday. OPEC's windfall suggests there will be demand for US debt from international investors even as the dollar falls to a record low versus the euro, Michael Pond, a debt strategist at Barclays Capital Inc, told Bloomberg News. Among foreign holders only Japan, China and the United Kingdom own more Treasuries than the 12 members of OPEC, which supplies more than 40 percent of the world's crude. Oil exporters eclipsed Asian nations last year as the biggest source of global capital for t

CONSUMER spending in the US rose more than forecast in August, a sign the fallout from a weaker job market and collapse in subprime lending has yet to reach the biggest part of the economy. The 0.6-percent rise in spending was the biggest in four months and followed a 0.4-percent increase in July, the Commerce Department said yesterday in Washington. The Federal Reserve's preferred measure of inflation cooled. Lower gasoline prices, auto-dealer discounts and a jump in air-conditioning use during last month's hot spell lifted demand, economists said. Smaller price increases give Fed policy makers room to reduce interest rates again should job losses and declines in home values lead to a deeper slowdown. "The third quarter should look good for consumer spending but that may be the high-water mark," Jonathan Basile, an economist at Credit Suisse Holdings in New York, said before the report. "We're seeing job growth moderate and housing becoming a bigger drag and that will continue to pour downward pressure on spending." US Treasury securities held earlier gains following the report. The yield on the benchmark 10-year note was at 4.54 percent at 8:35am in New York, from 4.57 percent late yesterday. Stock index futures trimmed losses. Incomes increased 0.3 percent in August after 0.5 percent, yesterday's report also showed. Income was forecast to rise 0.4 percent, according to the Bloomberg News survey median. Economists forecast spending, which makes up more than two-thirds of the economy, would rise 0.4 percent for a second month, according to the median of 76 estimates in the Bloomberg survey. The report's price gauge tied to spending patterns and excluding food and energy costs, the Fed's preferred measure, increased 0.1 percent in August for a sixth consecutive month. It was up 1.8 percent from August 2006, the smallest gain since February 2004. Some Fed policy makers, including Ben S. Bernanke before becoming chairman, have said they would prefer core inflation within a one percent to two percent range. Adjusted for inflation, spending also rose 0.6 percent in August, the most since October, after a 0.3-percent gain the prior month, the report showed.

NEW YORK (MarketWatch) -- U.S. Treasury prices were sharply up early Friday, sending yields lower, after U.S. nonfarm payrolls fell by an estimated 4,000 in August, the Labor Department said. This is the first decline since August 2003. The benchmark 10-year Treasury note was up 22/32 at 102 20/32 with a yield of 4.422%. The 30-year bond was up 27/32 at 104 02/32 with a yield of 4.758%. The 2-year note was up 9/32 at 100 4/32 with a yield of 3.945%. The decline in payrolls was much weaker than the 115,000 increase that had been expected by Wall Street economists surveyed by MarketWatch.