NEW YORK, Dec 1 (Reuters) - U.S. government bond prices fell on Tuesday, pulling benchmark yields up from recent eight-week lows, as easing concerns over Dubai's debt problems and strong housing data boosted riskier assets such as stocks.
State-controlled Dubai World said it will restructure nearly half of its estimated $59 billion in debt, assuaging concerns that a new chapter in the global credit crisis had been opened and giving stocks a lift. For details, see
The Dubai saga roiled financial markets for nearly a week, inspiring a safe-haven bond rally that sent benchmark 10-year yields down to their lowest since early October on Friday, but signs it was receding rekindled risk appetite.
Stocks gained at the expense of bonds, with investors shrugging off softer-than-expected data on manufacturing growth and latching onto surprisingly strong pending home sales figures instead.
'Stocks are up today and bonds are going to be down even if the data were mixed to the weakish side,' said Cary Leahey, senior managing director at Decision Economics in New York.
'The market reaction may be tied to the ripple effect of the Middle East, and the fact that bonds are probably taking their cue from stocks.'
Prices on 10-year notes were last down 8/32, pushing yields up to 3.23 percent from 3.20 percent at Monday's close. On Friday, yields fell as far as 3.15 percent.
Analysts will also watch figures on domestic vehicle sales throughout the day to further gauge the strength of the economic recovery.
At 12:20 p.m. (1720 GMT), Federal Reserve Bank of Philadelphia President Charles Plosser will deliver a speech, which traders are likely to follow closely for hints of the Fed's thinking on the future path of monetary policy.
The 30-year long bonds were down 17/32, yielding 4.23 percent versus Monday's close of 4.20 percent. During the recent safe-haven rally, long bond yields fell as far as 4.16 percent on Friday, their lowest since October 21.
The U.S. manufacturing sector grew in November, the Institute for Supply Management said, but the gains were less than October's and below analysts' forecast..
Pending sales of previously owned U.S. homes rose unexpectedly to their highest level in 3-1/2 years in October, a survey showed, suggesting the housing market recovery was gaining steam..
News from China, the world's third-largest economy, appeared to tip the global balance toward growth.
An index produced for HSBC, based on a poll of purchasing executives in manufacturing, hit a record high in November, while a parallel official index was unchanged at an 18-month peak..
(Additional Reporting by Chris Reese; Editing by Kenneth Barry) (burton.frierson@thomsonreuters.com;+1 646-223-6292; Reuters Messaging: burton.frierson.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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