Treasuries fall on rising inflation concerns
April 6th, 2011
07:57 PM ET

Treasuries fall on rising inflation concerns

A roundup of the day's business news headlines:

Stocks close higher on tech strength

U.S. stocks closed higher Wednesday as strength in the technology sector offset weakness in energy producers and industrial companies.

The Dow Jones industrial average rose 33 points, or 0.3%, to close at 12,426; the S&P 500 added 3 points, or 0.2%, to 1,335; the Nasdaq Composite gained 8 points, or 0.3%, to 2,799.

Tech stocks were among the best performers with Cisco leading gainers on the Dow. Shares of financial services companies were also strong, with American Express and JPMorgan both up more than 2%.

Energy stocks came under pressure after the government's weekly inventory report showed smaller-than-expected declines in U.S. supplies of oil and gasoline, raising fears that energy demand is waning. Monsanto fell sharply after the farm products company reported quarterly sales that disappointed some investors, even as profits rose.

After the market closed, shares of Bed Bath & Beyond surged 8% after the homeware retailer reported quarterly earnings and sales that beat analysts expectations.
Gold, silver and oil: The rally is back

Oil, gold and silver have been hitting new highs and experts expect the momentum to continue.

A combination of a weaker dollar, geopolitical turmoil and general fears about inflation will keep commodities elevated for the next several months, say analysts.

For the second day in a row, gold hit a new record high Wednesday, closing at $1,458.50 an ounce, and analysts say the yellow metal could climb over $1,550 an ounce in the near term.

Worries about inflation have reared their ugly head again this week. China's central bank raised interest rates for the fourth time this week, in part to combat the country's own inflationary problems.

The worries were exacerbated by the latest Fed minutes, which showed showed central bank officials at odds about rising prices. That could signal an interest rate hike sooner rather than later.

Unless that happens or the geopolitical situation actually stabilizes, gold prices will probably keep rising, said Carlos Sanchez, a precious metals analyst with the CPM Group.

Treasuries fall on rising inflation concerns

Treasury prices fell Wednesday as concerns about rising inflation and the outlook for interest rates in Europe and the United States took center stage.

On Thursday, the European Central Bank is expected to raise interest rates - a move aimed at battling long-term inflation. The ECB's potential move would come just days after the People's Bank of China just hiked interest rates for the fourth in time in six months.

The interest rate hikes leave the Federal Reserve as the odd man out. The central bank has kept interest rates near 0% since December 2008 and that's starting to make investors nervous that inflationary pressures may hit sooner rather than later.

"There's some concern about inflation," Williams Capital Group fixed income analyst David Coard said. He said there's also some renewed talk about how much the Fed will stick to its guns when it comes to ending QE2.

QE2 or "quantitative easing" program is the central bank's program aimed at spurring economic growth by flooding the system with liquidity.

- CNNMoney.com reporters Ben Rooney, Laurie Segall and Ken Sweet.

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Filed under: Economy • Finance
soundoff (10 Responses)
  1. Terry P

    When did they wake up? All they have to do is go to the food store weekly – they can experience real inflation.

    April 6, 2011 at 8:36 pm | Report abuse |
    • Perry T

      This is just the monthly installment of mis-information from our wonderful people in DC. They don't do their own shopping, obviously.

      April 6, 2011 at 8:46 pm | Report abuse |
  2. Jeff Frank

    $4 gas is here. Don't buy gas on Fridays.

    April 6, 2011 at 8:50 pm | Report abuse |
  3. citizen

    The Path
    To
    Prosperity
    restoring Americas SUPER RICH!

    April 6, 2011 at 9:38 pm | Report abuse |
  4. citizen

    The priority for the fake political parties is to maintain the lowest income tax rates for greedy pigs since WWII.
    Also to never allow any corpotation be taxed. Not one penny. Ever!

    April 6, 2011 at 9:50 pm | Report abuse |
  5. Jeff Frank

    Now it's a "blue ribbon commission" to decide what to do with nuclear waste. Thinks putting a Nobel Laureate on the payroll is going to reduce plutonium half – life. What I mean to say is that, where $1 is being saved, gov't is spending $10, for useless programs.

    April 6, 2011 at 10:36 pm | Report abuse |
  6. Herbert

    We need a third war. It will stimulate the economy; take on an easy country like Mexico.

    April 7, 2011 at 12:46 am | Report abuse |
  7. Nachyocheese

    atta boy..that was a good one ceasar... .

    April 7, 2011 at 1:57 am | Report abuse |
  8. Joey

    This inflation is based on spending Government-given money that is not based on productivity.
    Could the government stop it?
    You betcha!
    Why don't they?
    Ask yourself how it is to the government's advantage to allow inflation to spiral.
    Think it through to its conclusion, whether you find the conclusion awful or desirable.

    April 7, 2011 at 8:51 am | Report abuse |
  9. kenny

    We need peace not war

    April 7, 2011 at 8:22 pm | Report abuse |