Treasuries Surge in Flight to Safety
MARKETSCOPE: Treasuries were catapulted higher by a flight to safety in the wake of Lehman Brothers filing Chapter 11, Merrill Lynch agreeing to be bought by Bank of America, and AIG announcing a major asset sale.
The 10-year note soared 67/32 to 104-15/32 for a yield of 3.46%. The 30-year bond skyrocketed 100/32 to 106-15/32 for a yield of 4.12%.
The news today was very bad, and the lack of any recovery in stocks or downturn in Treasuries indicates the financial markets don't believe the worst is over. The S&P 500 was down as much as 4.0% intraday. Meanwhile, crude oil futures plunged over 6% to below $95, reflecting ongoing fears of a global economic slowdown.