Bonds Generally Finish Lower On Tuesday, Tuesday, May 01, 2007 3:31:23 PM

The mid-morning release of economic news caused a sell-off in the treasury market on Tuesday, sending bonds lower and treasury yields higher. Bonds declined with the release of stronger-than-expected data on the manufacturing sector but began to move back toward the unchanged line as Wall Street began exhibiting strength in the afternoon.

The 10-year yield began Tuesday`s session lower, continuing the downward trend that was seen throughout Monday`s trading. However, the data on manufacturing in April sent yields up nearly 5 basis points. As the day progressed, the 10-year yield slipped off its high for the session, but still closed up 1.2 basis points at 4.642%.

At the same time, the 5-year yield closed 2.3 basis points higher at 4.539%. Meanwhile, the 30-year yield slipped back below the flat line near the end of the day, closing at 4.816%, down less than a basis point on the day.

At 10 am Eastern Time, the ISM said that its index of activity in the manufacturing sector rose to 54.7 in April from 50.9 in March, with a reading above 50 indicating growth in the sector. Economists had expected a much more modest increase to about 51.0.

Meanwhile, the National Association of Realtors reported its index for pending sales of existing homes decreased at a seasonally adjusted annual rate of 4.9% to 104.3 in March from 109.7 in February.

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