Wall Street falls, bond yields near record lows

Mon Jul 16, 2012 6:15pm EDT
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By Wanfeng Zhou

NEW YORK (Reuters) - U.S. government bond yields flirted with record lows, oil prices rallied and the dollar fell to a one-month low against the yen on Monday after weak U.S. retail sales data fed bets a faltering economy would prompt more stimulus from the Federal Reserve.

Wall Street stocks ended down, although Citigroup's better-than-expected earnings limited losses. The S&P 500 has fallen in seven of the last eight sessions, weighed by concerns about economic growth.

U.S. retail sales fell 0.5 percent in June, the third straight month of decline, as demand slumped for everything from cars and electronics to building materials, a sign the economic recovery is flagging.

Markets looked ahead to Federal Reserve Chairman Ben Bernanke's semiannual testimony before congressional panels on Tuesday and Wednesday. Investors will parse his words for clues about the possibility and timing of another round of stimulus.

"I think people have started to re-price more easing coming through from the Fed after the retail sales data," said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut.

Benchmark 10-year Treasury notes traded up 6/32 in price for a yield of 1.469 percent. Earlier, the 10-year yield touched 1.442 percent, matching the lowest level going back to the early 1800s last seen on June 1, according to data compiled by Reuters.

The 30-year bond yield touched a session low of 2.520 percent, within striking distance of a record low of 2.510 percent set on June 1.

Central banks from Europe, China and Brazil earlier this month cut interest rates to bolster fragile growth, underscoring growing worries about a slowing global economy. But some analysts said Bernanke is likely to remain non-committal.   Continued...

Traders work on the floor of the New York Stock Exchange, July 2, 2012. REUTERS/Brendan McDermid