Treasuries rose for a fourth straight day after trading losses at Bank of America Corp. renewed concern that a credit-market rout may deepen, threatening economic growth.
The longest rally in U.S. government debt since August pushed yields lower for all maturities as investors sought shelter in the safest of securities. In another sign that investors are paring risk, yields on Treasury bills tumbled for a third day, causing the difference between the interest that banks and the U.S. government pay for three-month loans to increase to 1.45 percentage points, the widest since Sept. 28.
``The market believes the housing and subprime mess is going to take us to recession,'' said Charles Comiskey, head of U.S. government bond trading in New York at HSBC Securities Inc., one of the 21 primary securities dealers that trade directly with the Fed.
The yield on the two-year note fell 5 basis points, or 0.05 percentage point, to 3.94 percent at 1:56 p.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 4 percent security due in September 2009 rose 3/32, or 94 cents per $1,000 face amount, to 100 1/8.
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