Stock Slide Lifts Short End

Investors flocked to shorter-dated Treasuries, not bonds, as stocks crumbled in a selloff

Stocks were burned to a crisp Tuesday, but the losses didn't ignite much of a fire under the bond, which only gained 7/32 on a day where Nasdaq losses topped 120 points intraday. Sources reported little buying interest in bonds. Instead, players sought refuge in shorter dated Treasuries, driving bill yields down some 10 basis points and knocking nearly 10 basis points off the two-year note. The curve extended its steepening bias with the 2s-30s spread widening out through 134 basis points(widest since July 1994).

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