Bonds Meander Around Unchanged as Stock and Oil Prices Rise

Tough talk by Clinton turns a down day around in the final hour.
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Bond prices ended Monday little changed after a mind-numbingly dull session in which there were no market-moving economic indicators and volume was less than half normal.

Tough talk by

President Clinton

about the Kosovo crisis shortly after 3 p.m. EDT appeared to push the benchmark 30-year Treasury bond's price into positive territory. Concern about a protracted conflict should boost demand for safe, liquid Treasuries, and Clinton, speaking at the White House, said

NATO

air strikes against Serb targets in Yugoslavia will continue until

President Slobodan Milosevic

halts hostilities against Kosovo's ethnic Albanians.

But the Treasury bond futures contract traded on the

Chicago Board of Trade

, where the closing bell rings at 3 p.m., ended the day down 1/32, and in both the futures and the cash markets the tendency over the course of the day was to drift lower, as stocks surged and oil prices tacked on another 25 cents.

The cash long bond ended the day up 3/32 at 95 2/32, its yield a basis point lower at 5.59%. Shorter-maturity note yields were likewise little changed at the end of a day in which just $29.2 billion of Treasuries changed hands by 3 p.m., 52.8% below average for a second-quarter Monday, according to tracker

GovPX

.

Describing the action as "listless,"

Warburg Dillon Read

U.S. economist Richard Kasmin said: "People are remaining on the sidelines just because of oil prices and the equity market."

The benchmark crude oil contract traded on the

New York Mercantile Exchange

, now up more than 45% from its mid-February low, rose another 28 cents today to 16.92, the highest since mid-June. As for stocks, the

Dow Jones Industrial Average

added 174.82 points and closed above 10,000 for the second time. "If there was any more rally left in bonds after the employment data, it got knocked off due to the strong equity market," Kasmin said.

The long bond's price rose more than a full point

Friday after the March

employment report

detected significantly less payroll growth than economists were forecasting. But the gain came on volume that traders estimated was a tenth of normal, giving it an air of vulnerability.

For most of the day, rising stock prices provided the main excuse to take profits, said Gib Clark, head trader at

Zions First National Bank

. "We just watch the stock market continue to go up and siphon off investment dollars."