BOND REPORT: Treasurys Curb Losses On Auto Bailout, Yields Rise

By Laura Mandaro

Treasurys pared their losses in early afternoon trade Friday after some of the euphoria over the U.S. auto bailout moderated, though yields on mid-term maturities made sizeable one-day rises.

The 10-year Treasury note last traded flat, with yields (UST10Y) at 2.08%, roughly in line with levels late Thursday. Yields on the benchmark security, which move inversely to prices, had fallen as much as 0.9% earlier, sending yields 11 basis points higher.

In light and choppy trading ahead of a holiday-shortened week, short to medium term Treasurys (UST2YR) took the brunt of selling. Yields on two-year rose 5 basis points to 0.74%, three-year note yields gained 8 basis points to 1.01% and five-year notes advanced 6 basis points to 1.32%.

BOND REPORT: Treasurys End Euphoric Week On Down Note; Yields Tip Up

By Laura Mandaro

Treasurys fell Friday, flattened by a bout of optimism on the U.S. economy after the White House unveiled a rescue package for Detroit's automakers and ahead of record auctions next week.

On Friday, the 10-year Treasury note slid 0.1%, with yields (UST10Y) at 2.12%, four basis points higher than levels late Thursday. Yields on the benchmark security, which move inversely to prices, had risen as much 11 basis points earlier.

Still, the rush into Treasurys spurred by the Federal Reserve's aggressive moves to lower interest rates drove 10-year yields nearly a half percentage point down for the week, and they set new lows along the way. As of Thursday, Treasurys had returned 2% for the week, according to Merrill Lynch's index of high-rated U.S. government debt.

In light and choppy trading ahead of a holiday-shortened week, short to medium term Treasurys (UST2YR) took the brunt of selling. Yields on two-year notes rose 4 basis points to 0.73%, three-year note yields gained 9 basis points to 1.03% and five-year notes advanced 8 basis points to 1.36%.

LATIN AMERICAN MARKETS: Equities Unable To Gain Ground After U.S. Reaches Carmaker Deal

By Carla Mozee

Key Latin American stock markets finished lower Friday, unable to log gains after U.S. automakers won an emergency-loan package from the government after months of volatile negotiations.

Brazil's Bovespa fell 1% to 39,131.23, and Mexico's IPC lost 0.6% to 22, 221.64.

Argentina's Merval lost 1.7 % to end at 1,093.57, and Chile's IPSA shed 0.2% to 2,346.46.

Brazil's oil heavyweight Petrobras (PBR) shed 0.6%.

All steel stocks ended lower. Vale (RIO) fell 0.4% and Usiminas lost 0.2%. Gerdau (GGB) shares fell 1.8%, and Companhia Siderurgica Nacional (SID) fell 1.9%.

Moody's Investors Services, which revised outlooks on Gerdau, Gerdau Ameristeel Corp. and CSN's backed notes to stable from positive, said its actions reflect expectations for weakened debt protection metrics as well as rapid deterioration of steel-industry conditions worldwide, said Moody's.