Treasuries Pull Back Amid Rally On Wall Street

(RTTNews) - Treasuries moved to the downside during trading on Monday, offsetting the strength seen in the previous session last Friday.

Bond prices came under pressure in early trading and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 3.6 basis points to 2.187 percent.

With the increase on the day, the ten-year yield reached its highest closing level in well over a month.

The pullback by treasuries came amid continued strength among stocks, which rallied in reaction to news on the merger-and-acquisition front.

Traders were also reacting to the latest U.S. economic news, including a report from the Institute for Supply Management showing a slight expansion in manufacturing activity in the month of October.

The ISM said its purchasing managers index edged down to 50.1 in October from 50.2 in September, although a reading above 50 still indicates growth in the manufacturing sector. Economists had expected the index to dip to 50.0.

Bradley J. Holcomb, chair of the ISM Manufacturing Business Survey Committee, said, "Comments from the panel reflect concern over the high price of the dollar and the continuing low price of oil, mixed with cautious optimism about steady to increasing demand in several industries."

A separate report from the Commerce Department showed that construction spending rose by more than expected in the month of September.

The report said construction spending climbed 0.6 percent to an annual rate of $1.094 trillion in September from the revised August estimate of $1.088 trillion. Economists had expected spending to rise by 0.4 percent.

Trading on Tuesday may be impacted by reaction to the release of the Commerce Department's report on factory orders in the month of September.