CREDIT : Bond Prices Slip Slightly

NEW YORK — Bond prices ended slightly lower in quiet trading Monday, reversing some of the previous session’s gains.

The Treasury’s bellwether 30-year issue slipped nearly point, or $2.50 per $1,000 face amount. Its yield rose to 9.11% from 9.10% on Friday.

The closely watched bond had risen about $5 in the previous session after the government reported only modest inflation on the wholesale level during April.

Analysts attributed the decline to higher commodity prices, which are often seen as a barometer of increased inflation, and worries about the April merchandise trade report due out today.

Wider Trade Gap a Threat

“I think the market was in a trance today awaiting the impending storm, which it calls the trade deficit report,” said Jay Goldinger, an investment banker with Beverly Hills-based Capital Insight Inc.

Although some economists predict a slight narrowing of the U.S. trade gap, a move in the other direction could cause bond prices to tumble.

Analysts said the credit markets shrugged off a government report Monday showing a 0.7% rise in April industrial production since the increase was in line with expectations.

In the secondary market for Treasury bonds, prices of short-term governments fell about 1/16 point, intermediate maturities were 1/8 point to 3/16 point lower and long-term issues ranged from 1/8 point to 3/8 point lower, according to figures provided by the financial information concern Telerate Inc.

The movement of a point is equivalent to a change of $10 in the price of a bond with a $1,000 face value.

Bond Buyer Index Down

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, fell 0.08 point to 109.49. The Shearson Lehman Hutton daily Treasury bond index, which makes a similar measurement, fell 0.63 to 1,145.88.

In the tax-exempt market, the bond buyer index of 40 actively traded municipal bonds was down 1/32 point at 80. The average yield, however, declined to 8.13% from 8.14% late Friday.

Yields on three-month Treasury bills were down 3 basis points to 6.16%. Six-month bills rose 3 basis points to 6.45% and one-year bills were up 2 basis points at 6.82%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, traded at 7.313%, up from 7.188% on Friday.