Treasury prices seesaw to end higher as new home sales climb but remain weak

Treasury prices seesaw as new home sales climb

NEW YORK — Treasury prices seesawed Monday to end higher after data showed sales of new homes jumped last month, despite being the second-weakest month on record.

The yield on the 10-year Treasury note slipped to 2.99 percent Monday afternoon from 3 percent late Friday. That yield helps set interest rates on mortgages and other kinds of loans.

The price of the 10-year note edged up 6.25 cents to $104.25. Earlier in the session, it traded as low as $103.875.

The Commerce Department said sales of new homes increased to an annual rate of 330,000 units in June, ahead of the estimates of economists polled by Thomson Reuters. The gain came after sales hit a record low in May as high unemployment, slow job growth, and tight credit have made buyers skittish about shopping for homes.

“There seems to be a dip buying mentality, as well as enough uncertainty in the recovery,” said Kim Rupert, managing director of global fixed income analysis at Action Economics. Rupert said the rise in prices was likely a reaction to Friday’s losses.

Stock also rose Monday after shipping giant FedEx Corp. raised its profit outlook. The Dow Jones industrial average added more than 100 points.

Investors are awaiting several auctions this week that will boost supply of two-, five- and seven-year notes. Treasury yields rise when their prices fall.

In other trading, the yield on the two-year note was unchanged at 0.60 percent. Its price was also flat at $100.031.

The yield on the 30-year bond was flat at 4.02 percent, while its price rose 9.375 cents to $106.094.

The yield on the three-month Treasury bill was unchanged at 0.14 percent. Its discount rate was 0.14 percent.