January 04, 2008 |
|Treasurys turned mostly higher on Thursday, while stocks turned lower, as investor concerns about the economy resurfaced ahead of Friday's key employment report for December.|
Bonds first headed south as other data on U.S. jobs helped soothe some of the worst fears about employment.
"Yields, the dollar and stocks all initially bounced, with support from a surprise jump in factory orders data as well, though extortionate levels on crude oil above $100 barrel ... and a record high on gold kept investors second guessing the data signals," analysts at Action Economics said in a note.
Oil and gold, often seen as proxies for inflation, kept investors nervous about the Federal Reserve's willingness to cut interest rates to boost the economy.
The 30-year bond, which falls on expectations of higher inflation, was down 4/32 at 110 15/32.
Meanwhile, the benchmark 10-year Treasury bond reversed early losses to gain 4/32 to 102 29/32.
The two-year note, which rises along with expectations for cuts in interest rates, was up 4/32 at 100 27/32, yielding 2.815%.
The market eagerly awaits the official December jobs report, which will be released Friday morning. Economists surveyed by MarketWatch on average expect the economy to have added 58,000 jobs in December, compared with 94,000 in November.
Bonds earlier lost some steam after two sessions of strong gains after other jobs data seemed to confirm expectations Friday's report.
First-time jobless claims fell 21,000 in the latest week, halting a recent streak of rising claims that had worried economists. Meanwhile, continuing claims maintained their rise, hitting their highest level in over two years.
At the same time, the U.S. private sector added 40,000 jobs in December, according to the ADP employment report, which comes a day before the official government report. Adding in some 25,000 jobs created by the government, the ADP report suggests nonfarm payrolls grew by about 65,000, close to the 58,000 now expected.
Stocks, which slid Wednesday amid worries about the economy, first received a boost following the data. But the Dow Jones Industrial Average shaved off earlier gains to finish with modest gains, while the rest of the market ended lower.