Treasuries halt six-day drop while Dow fluctuates near record

Treasuries rose for the first time in seven days while Britain’s pound touched to the lowest level since 2010 versus the dollar after U.K. industrial production unexpectedly fell. Most U.S. stocks fell.

Ten-year U.S. note yields decreased four basis points to 2.02% at 3:24 p.m. in New York and the yen climbed 0.3% against the dollar, paring an earlier 0.7% gain. The pound pared losses after weakening as much as 0.6% to $1.4832. The Standard & Poor’s 500 Index slipped 0.2% as three U.S. stocks fell for every two that rose. Industrial metals led commodities higher and gold futures rose for a fourth straight day, the longest rally in six months, amid speculation central banks will expand stimulus.

The Dow Jones Industrial Average swung between gains and losses after rising to a record yesterday for a fifth straight day, extending its 2013 gain to 10%. European Union leaders will meet in Brussels for a summit on March 14-15 to discuss rescue plans for Cyprus. Treasuries remained higher after the U.S. auctioned $32 billion in three-year notes.

“The Fed isn’t going to move any time soon, and that means we aren’t going to stray far from these levels which support the front end of the yield curve,” said Adrian Miller, director of fixed-income strategies at GMP Securities LLC in New York. “And the recent backup in yields brought buyers in as well.”

Thirty-year U.S. bonds also snapped a six-day slide, sending yields down five basis points to 3.21%. The securities sold today drew a yield of 0.411%, compared with an average forecast of 0.413% in a Bloomberg News survey of seven of the Federal Reserve’s 21 primary dealers. The bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 3.51, versus a 3.61 average at the past 10 sales. Treasuries fell for the past six days as stronger-than-forecast U.S. economic data damped safety demand.

Approaching Record

The S&P 500 yesterday rose to within nine points of its 2007 record. Among its 10 main groups today, technology, industrial and financial shares led losses while telephone, commodity and health companies rose. Bank of America Corp., Caterpillar Inc. and Walt Disney Co. dropped more than 1% to lead the Dow lower today.

Citigroup Inc. fell 2.3% to pace losses in financial shares, retreating from a two-year high, and the KBW Bank slipped from the highest level since April 2010.

A planned international limit on bank indebtedness will be on the agenda of every meeting of the Basel Committee on Banking Supervision this year as regulators seek to wean lenders off their addiction to debt, according to three people familiar with the talks. Regulators are preparing to fight lenders over the details of the so-called leverage ratio as they seek to toughen rules on the minimum amount of capital they must use to back their investment. The Basel group will meet tomorrow.

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