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Treasurys rise ahead of earnings

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Look at those yeilds still dropping... cwm15.gif

 

NEW YORK (Reuters) -- U.S. government debt prices climbed Friday, as investors searched for bargains following Thursday's sell-off and on the view of a distant, sluggish economic recovery.

 

Investors also jumped back into Treasurys on worries over second-quarter earnings and relief the market digested this week's $73 billion in long-dated supply without much of a hitch, analysts said.

 

"People are coming to the realization that the economy is not out of the woods," said Ron D'Vari, chief executive officer at New Oak Capital in New York.

 

A profit warning from Chevron Corp (CVX, Fortune 500) pushed stocks lower and underscored recent evidence signaling the U.S. economy continues to deteriorate albeit at a slower rate.

 

On Friday, government data showed a surprise contraction in the U.S. trade gap in May and bigger-than-expected increases in export and import prices. These reports suggest some stabilization on the global trade front.

 

The trade deficit shrank to $25.96 billion in May, the smallest since November 1999, while U.S. import prices jumped 3.2% in June, the largest single-month rise since November.

 

The price on benchmark 10-year Treasury notes were last up 23/32 at 98-11/32. Their yield which moves inversely to the price was 3.33% down from 3.41%Thursday. The 10-year yield is not far above the seven-week low of 3.28% set two days ago.

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