Dow Falls as Bond Yields Soar

Record high yields threaten higher mortgage rates
By Peter Fearon,  Newser Staff
Posted Jun 13, 2007 7:13 AM CDT
Dow Falls as Bond Yields Soar
'   (Associated Press)

US bond yields have hit a five year high—bringing the threat of higher interest rates, costlier home mortgages and a slowing economy, the Wall Street Journal reports. The benchmark 10-year Treasury note rose to 5.25 per cent yesterday. Rising bond yields echo throughout the economy, making stocks less attractive to investors.

That was reflected in a 130 point—or 1%—drop in the Dow yesterday. One investment banker told the Journal: "Many people have rationalized their involvement in risky assets like stocks by saying that bond yields are low, and now they're rising and catching people off guard." (Read more bonds stories.)

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