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                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, April 3, 1993                   TAG: 9304030061
SECTION: BUSINESS                    PAGE: A-8   EDITION: METRO 
SOURCE: Associated Press
DATELINE: NEW YORK                                LENGTH: Short

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TREASURY BOND PRICES PLUMMET

Treasury bond prices were sharply lower Friday and the 30-year bond yield moved above 7 percent.

The price of the Treasury's main 30-year bond was down 25/32 of a point, or $7.81 per $1,000 in face value, around midday, while its yield rose to 7.03 percent.

The drop extended a broad market decline. On Thursday, the bond's yield closed at 6.96 percent as its price fell $5. Prices and yields move in opposite directions.

Analysts said Friday's declines, which were concentrated in long-term securities, apparently resulted from inflationary fears sparked by the government's monthly report on unemployment.

The bond market reacts favorably to weakness in economic data, because that increases the chances for a reduction in interest rates.

Components of the unemployment data also stoked inflationary fears. Inflation erodes the value of fixed-income securities such as bonds.

Yields on three-month Treasury bills fell to 2.94 percent as the discount dropped .02 percentage point to 2.89 percent. Six-month yields fell to 3.06 percent as the discount fell 0.02 point to 2.98 percent. One-year yields dropped to 3.26 percent as the discount fell 0.01 point to 3.15 percent.

Yields are the interest bonds pay by maturity; the discount is the interest at which they are sold.

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