NEW YORK, OCT. 8 -- The dollar's fall against major currencies and disappointment with the results of the latest Treasury auction combined to push bond prices lower today.
The Treasury's closely watched 30-year issue dropped about 1/2 point, or $5 per every $1,000 in face value. Its yield, which moves inversely to its price, jumped to 9.85 percent from 9.79 percent late Wednesday.
Analysts said bond prices came under pressure from the declining dollar -- which makes instruments denominated in the U.S. currency, such as bonds and notes, less attractive to foreign investors. The dollar was quoted at 144.17 Japanese yen in late New York trading, down from 145.19 yen late Wednesday.
"The key is the dollar," said Jay Goldinger, an investment broker for Cantor, Fitzgerald & Co. Inc. in Beverly Hills, Calif.
There was also some residual disappointment with the Treasury's auction Wednesday of $6.76 billion in seven-year Treasury notes, analysts said. Yields on the notes rose to the highest level since late 1985. The average yield was 9.51 percent, up from 8.10 percent at the last comparable auction on June 25.
The auction "didn't go as well as was expected," said Elizabeth Reiners, a vice president of investment firm Dean Witter Reynolds Inc.
In the secondary market for Treasury bonds, prices of short-term government issues declined 5/16 point to 9/16 point, intermediate maturities fell about 17/32 point, and 20-year issues dropped 27/32 point, according to Telerate Inc., a financial information service.
The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.
The Merrill Lynch Daily Treasury Index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, was down 0.50 at 105.73.
The Shearson Lehman Daily Treasury Bond Index, which makes a similar measurement, tumbled 4.93 to 1107.78.
In corporate trading, industrials fell 1/2 point and utilities slumped 3/4 point, according to investment firm Salomon Brothers Inc.
Moody's Investment Grade Corporate Bond Index, which measures price movements on 100 corporate bonds with maturities of five years or longer, declined 0.67 to 251.33.
Among tax-exempt municipal bonds, general obligations were down 3/4 point and dollar bonds retreated 3/8 point in light activity, Salomon Brothers said.
Rates on three-month Treasury bills, meanwhile, jumped 16 basis points to 6.66 percent, according to Telerate. A basis point is one-hundredth of a percentage point. Six-month bills soared 34 basis points to 7.28 percent and one-year bills advanced 22 basis points to 7.63 percent.