Interest rates drop in light Treasury trading as retail sales come in below expectations

Treasury yields fall on weak retail sales report

NEW YORK — Interest rates fell in light trading in the Treasury market Friday after a retail sales report missed economists’ expectations.

The price of the Treasury’s 10-year note rose 62.5 cents to $99.563, while its yield is 2.68 percent, down from 2.75 percent late Thursday.

Stocks fluctuated Friday after the Commerce Department’s mixed readings on consumer spending showed retail sales rose 0.4 percent in July. That’s an improvement but below economists’ forecast of a gain of 0.5 percent.

The report did show strength in auto sales, but it also showed that consumers are shying away from other purchases.

Interest rates in the Treasury market have tumbled this week as traders take a bleaker view of the U.S. economy and move their money from stocks into the safety of government securities. Consumer spending has remained weak along with the labor market, and there are no signs that employers are ready to start hiring at a pace to help lift the economy.

A week ago, the 10-year yield stood at 2.82 percent, and on Aug. 2, the first trading day of the month, it was 2.97 percent.

In other trading, the yield on the Treasury’s two-year note slipped to 0.54 percent from 0.55 percent. Its price added 3.13 cents to $100.156.

The yield on the 30-year bond dropped to 3.86 percent from 3.95 percent, while its price jumped $1.594 to $100.25.

The yield on the three-month Treasury bill was unchanged at 0.14 percent. Its discount rate was 0.15 percent.