Stocks Jump On Relief Over Gov't Debt Auction

TIM PARADIS

NEW YORK (AP) — Interest rate movements called the shots on Wall Street for the second straight day.

The bond market recovered on Thursday, bringing stocks along with it, a day after panicky selling pushed long-term borrowing rates to their highest level in six months.

Stock indicators rose more than 1 percent, including the Dow Jones industrial average, which gained almost 104 points.

The yield on the 10-year Treasury note, a widely used benchmark for mortgages and other kinds of loans, moved decisively lower to 3.62 percent from 3.75 percent the day before as investors were relieved to see ample demand at an auction for Treasury debt.

The note's yield had surged the day before, triggering a selloff in stocks, on concerns that a flood of U.S. government debt coming to market this year would overwhelm demand. In addition to raising borrowing costs for the government, higher yields on long-term Treasurys could threaten a recovery by driving up borrowing costs for consumers. The Federal Reserve has said it would buy large amounts of Treasurys and other kinds of debt in an effort to keep borrowing costs low.