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Bonds Close Out Top-Notch Year On Last Dose Of Slowdown News.(B)(Credit Markets)

Investor's Business Daily

| January 02, 2001 | COPYRIGHT 2001 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

By Reuters

U.S. Treasuries rose on Friday as a Nasdaq retreat and a Chapter 11 bankruptcy filing by steel maker LTV Corp. enhanced the appeal of relatively risk-free U.S. government securities to investors.

A clutch of weak economic reports also maintained the bond-friendly outlook forslow economic growth and the probability of Federal Reserve interest rate cutsnext year.

C R E D I TM A R K E T S

The developments only improved the Treasury m

arket's winning performance this year.

As of Thursday's close, U.S. Treasuries had a total return of 13.32% for the year, outpacing a 9.046% return for corporate bonds and an 11.128% return for mortgage-backed securities, according to Merrill Lynch's U.S. bond index. Only municipals did better, offering a total return of 16.98% year-to-date as of Thursday.

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