NEW YORK -- Bond prices rose Wednesday as traders responded to Federal Reserve Chairman Alan Greenspan's latest comments on the state of the economy.
The price of the benchmark 10-year Treasury note gained 19/32 point, or $5.94 per $1,000 in face value, with its yield falling to 4.16 percent from 4.24 percent on Tuesday.
The 30-year Treasury bond rose 13/16 point to yield 4.96 percent, down from 5.01 percent on Tuesday, according to Moneyline Telerate.
Greenspan told Congress on Wednesday that "on the whole, the expansion has regained some traction."
The comments could set the stage for the Fed to raise short-term interest rates for the third time this year, when policymakers meets again on Sept. 21.
On Wall Street, the Dow Jones industrial average fell 29 to 10,313. The Standard & Poor's 500 index declined 5 to 1,116, while the Nasdaq composite index lost 8 to close at 1,851.
In other trading, the benchmark 2-year note gained 5/32 point to yield 2.48 percent, down from 2.56 percent on Tuesday. Intermediate maturities rose between 1/4 point and 9/16 point.
Yields on one-month Treasury bills were 1.52 percent as the discount rose 0.02 percentage point to 1.50 percent.
Yields on three-month Treasury bills were 1.64 percent as the discount rose 0.02 percentage point to 1.61 percent.
Six-month yields were 1.88 percent, as the discount fell 0.01 percentage point to 1.83 percent.
Yields are the interest bonds pay by maturity, while the discount is the interest at which they are sold.
The federal funds rate, the interest on overnight loans between banks, declined to 1.50 percent from 1.56 percent.
In the tax-exempt market, the Bond Buyer index of 40 actively traded municipal bonds 5/16 to 111 3/32. The average yield to maturity fell to 4.97 percent from 4.98 percent.
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