CREDIT : Bonds Issues Rise Slightly; Uncertain Economy Cited

NEW YORK — Bond prices rose modestly in light trading Wednesday as the government provided more evidence of economic sluggishness.

The Treasury’s key 30-year bond rose 3/8 point, or about $3.75 for every $1,000 in face value, as its yield slipped to 8.31% from 8.35% late Tuesday.

Trading has been very light this week, and analysts ascribe that to consternation about whether the economy is headed into a recession or simply slowing down.

William Sullivan, director of money market research at Dean Witter Reynolds, said the bond market was “marking time” until Friday’s scheduled release of February employment figures.

Report Affects Prices

The employment figures are usually the first economic statistics released for any given month and they provide the most recent evidence available on general economic activity.

Sullivan said one factor contributing to the mild bond price rise on Wednesday was a new Commerce Department report that said sales of new homes fell 9% in January.

A slow-growing economy is generally viewed positively by bond traders because it usually means credit demand will be weak, allowing room for interest rates to fall.

In the secondary market for Treasury bonds, prices of short-term governments rose 2/32 point, intermediate maturities rose point and 20-year issues rose 11/32 point, the financial information service Telerate Inc. reported.

Indexes Rise

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

The Merrill Lynch daily Treasury index, which measures price movements on all outstanding Treasury issues with maturities of a year or longer, rose 0.14 to 113.93. The Shearson Lehman daily Treasury bond index rose 1.82 to 1,192.20.

Among corporate bonds, industrials and utilities rose 1/8 point in light trading, the investment firm Salomon Bros. said.

Yields on three-month Treasury bills fell 2 basis points to 5.60%. Six-month bills fell 6 basis points to 5.85% and one-year bills fell 2 basis points to 6.16%. A basis point is one-hundredth of a percentage point.

The federal funds rate, the interest on overnight loans between banks, traded at 6.50%, down from 6.675% on Tuesday.

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