NEW YORK (AP) ¿ Interest rates dipped in the market for previously issued Treasurys Tuesday after a successful auction of $42 billion of five-year notes.
The yield on the 10-year Treasury note, which is used as a benchmark for interest rates on mortgages and other consumer loans, slipped to 3.80 percent from 3.85 percent Monday. Its price rose 12/32 to 96 17/32 in late trading.
Meanwhile, the yield on previously issued five-year notes fell to 2.57 percent from 2.60 percent. Its price rose 5/32 to 97 31/32.In the auction, the second big debt sale by the government this week, the measure of demand known as the bid-to-cover ratio was 2.59. That was slightly less than at a similar auction last month, but in line with the recent average, said Matt Freund, vice president of fixed income investments at USAA Investment Management Co. Demand was good for such a slow week of trading, he said. Many investors are taking vacation this week between Christmas and New Year's Day. Auctions have continued to go smoothly this year despite worries that the massive amounts of supply would overwhelm demand. "I think it's just the market breathing a big sigh of relief," Freund said. "If it did not go well, it would have been a much bigger story."