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Treasury prices ended the week on a rebound as weakness in the stock market shifted investing momentum toward safer government securities. The long bond had the biggest rise in value, selling two-thirds of a point higher.

The short end of the money market was also buoyed by talk of an intermeeting move by the

Federal Reserve, especially as the broad equity indexes appear to be in danger of slipping a couple of hundred points more.

The benchmark 10-year

Treasury note rose 14/32 to 99 7/32, lowering its yield to 5.101%.

The 30-year

Treasury bond rose 21/32 to 98 14/32, lowering its yield to 5.482%.

Despite the inverse relationship between equities and Treasuries that has been evident over the last few days, analysts remain uncertain about its relevance for ongoing trades.

"I am a little bit skeptical about the strength of the long bond market, and I do not see the flight-to-quality buying," said John Kosar, technical analyst at


. Market watchers have suggested that with the Fed determined to keep stocks from sliding too low, fixed-income securities may not see funds flowing from that direction.

Kosar, who tracks the pricing pattern in bonds based on the 10-year note and agency futures and internationally, on the Eurex Bund and U.K. gilt futures, prefers to highlight the narrowed trading range in the money market. "Such a situation is usually the springboard for the next development, and 80% of the time, the effect is bullish," he said.

Although the "sideways congestion in the trading pattern typically breaks on the upside," Kosar cautions that it is too early to say if bonds will come back. "The two-thirty yield curve

the curve between two-year notes and the 30-year bond is very high and getting close to where it was in October 1998," he noted. The difference between the yields of the two-year note and the 30-year Treasury is currently at more than 90 basis points.

Rising consumer prices for January had investors concerned for a while that the resulting inflationary threat would deter the central bank from lowering rates. However, hopes have risen once again for a quarter percent point cut in short-term rates before the next monetary policy meeting on March 20.

Kosar regards such swings in outlook as of lesser importance in the long run. "The two-thirty spread still has value for what it is supposed to show. Talk of a 25 basis-point cut is relevant on a micro level but in a macro perspective it is just noise."

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So how does a narrow trading range relate to economic data, especially some critical numbers on manufacturing and consumer confidence surveys that is due next week? To answer that one, Kosar tried to read the mind of the trader down in the pit.

"Economic news is definitely a potential catalyst for margin movement as it facilitates or even exacerbates the breakout from the current price pattern," he says. He explained further: "When the range starts to compress, the difference of opinion between the buyer and the seller is highly responsive. In other words, people who are betting in the wrong direction find that out very quickly, and often act swiftly to get the market going."

But the truer direction of the market may take some time to become apparent. Kosar attributes that to the "near-term bullying of the market or the fear-and-greed factor" that kicks off trading either way. "But it takes two to three days for the market to break out in earnest," he said. According to him, a successful resurgence of bonds would take the yield of the 30-year down to about 5%.

A day after President George W. Bush held his first press conference and used encouraging words to realign the economy in a positive direction, White House economic advisor Lawrence Lindsey re-expressed the theme. Talking to an Italian daily newspaper, he said the "right road is lower interest rates and retroactive tax cuts." He also ascribed the spike in consumer prices to higher energy costs, terming it a "technical reason."

At the

Chicago Board of Trade

, the March

Treasury futures contract was up 26/32 to 104 1/32.

Currency and Commodities

The dollar fell against the yen and the euro. It lately was worth 116.05 yen, down from 117.11. The euro was worth $0.9184, up from $0.9048. For more on currencies, see


Currencies column.

Crude oil for March delivery at the

New York Mercantile Exchange

rose to $29.37 a barrel from $28.82.


Bridge Commodity Research Bureau Index

rose to 221.02 from 220.61.

Gold for March delivery at the


rose to $259.60 an ounce from $258.50.