Treasury prices gyrate as stocks tumble

(AP) — Interest rates were mixed in the bond market Friday as worries about President Barack Obama's plans to tighten restrictions on banks pounded stocks.

Disappointment over corporate earnings reports also helped push stocks lower. The Dow Jones industrial average has fallen 552 points, or 5.2 percent, in three days, its steepest slide since hitting a 12-year low in March.

Investors sold longer-term Treasurys after Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said mortgage finance companies Fannie Mae and Freddie Mac should be eliminated. If that were to happen it would curtail demand for government debt.

The yield on the 10-year Treasury note that matures in November 2019 — a benchmark for interest rates on mortgages and other consumer loans — rose to 3.61 percent in late trading from 3.59 percent late Thursday. Its price fell 5/32 to 98 1/32.

The yield of the 30-year bond that matures in November 2039 rose to 4.54 percent from 4.49 percent and its price fell 21/32 to 97 11/32.

Short-term Treasury prices rose as jittery investors looked for the safest investments as stocks fell and as uncertainty surrounded the Senate confirmation of Federal Reserve Chairman Ben Bernanke.

Some lawmakers said Friday that Bernanke shouldn't be reappointed for another four-year term. The Senate has not yet scheduled a vote on his appointment. His current term expires on Jan. 31.

The yield on the two-year note maturing in December 2011 fell to 0.80 percent from 0.83 percent, while its price rose 2/32 to 100 12/32.

The yield on the three-month T-bill that matures April 22 was unchanged at 0.04 percent. Its discount rate stood at 0.05 percent.