Treasury prices mostly rose Friday after steeper-than-expected losses at insurer AIG stirred fresh concern about strains still taxing the global financial system and as stocks retreated following another advance in oil prices.
American International Group Inc. revealed plans to raise $12.5 billion in the months to come as the company tries to recover from declines in the value of some credit market investments. The news weighed on the equity markets, as did oil's first foray above $126 per barrel, which came early Friday; the bond market is often the beneficiary of a decline on Wall Street.
Higher oil prices again stirred inflation concerns for both stock and bond investors. The threat of rising prices often hits bonds because fixed-income investments become less attractive if they can't keep up with inflation.
John Spinello, bond strategist at Jefferies & Co., said that investors appeared to take their queues from the stock market's pullback.
"There was a little bit of drift _ probably some profit-taking as the stock market came back," he said.
Still, Friday's Treasury session was quiet with light volume, Spinello said.
The benchmark 10-year Treasury note rose 3/32 to 100 28/32 and its yield fell to 3.77 percent from 3.78 percent late Thursday, according to BGCantor Market Data. Bond prices move in the opposite direction of yields.
The 30-year long bond rose 10/32 to 97 16/32 and yielded 4.53 percent, down from 4.54 percent late Thursday.
The 2-year note was down 1/32 at 99 25/32 and its yield rose to 2.24 percent from 2.22 percent late Thursday.
In late trading, the 10-year yield rose to 3.78 percent. The yields of the 30-year and 2-year notes remained unchanged from the session's close.
The yield of the 3-month Treasury bill was 1.61 percent and the discount rate was at 1.58 percent.
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