Bond yields fall on concerns about Europe debt

(AP) — Interest rates slipped in the bond market Monday as concern rose about yawning budget gaps in some European countries.

Yields fell as Treasury prices rose for a third straight day. Concern is growing that some strapped European countries including Greece, Portugal and Spain will have trouble meeting their debt obligations. Disruptions in their ability to raise money in debt markets could spread to other parts of the world's financial system.

The Dow Jones industrial average fell 104 points to close below the psychological barrier of 10,000 for the first time since Nov. 4.

The yield on the 10-year Treasury note maturing in November 2019, which is a benchmark for interest rates for mortgages and other consumer loans, was unchanged at 3.57 percent from late Friday. Its price rose 3/32 to 98 14/32.

The yield on the two-year note that matures in January 2012 slipped to 0.77 percent from 0.78 percent, while its price was flat at 100 6/32.

The yield of the 30-year bond maturing in November 2039 fell to 4.50 percent from 4.53 percent. And its price rose 14/32 to 97 30/32.

The yield on the three-month T-bill that matures May 6 rose to 0.10 percent from 0.08 percent. Its discount rate stood at 0.10 percent.