1 The stock market's woes spooked currency traders but prompted a quiet little party among bond investors.
2 Prices of long-term Treasury bonds moved inversely to the stock market as investors sought safety amid growing evidence the economy is weakening.
3 But the shaky economic outlook and the volatile stock market forced the dollar lower against major currencies.
4 The bond market got an early boost from the opening-hour sell-off in stocks.
5 That rout was triggered by UAL Corp. 's announcement late Monday that the proposed management-labor buy-out had collapsed.
6 The 80-point decline in the Dow Jones Industrial Average during the morning trading session touched off a flight to safety that saw investors shifting assets from stocks to Treasury bonds.
7 At its strongest, the Treasury's benchmark 30-year bond rose more than a point, or more than $10 for each $1,000 face amount.
8 As the stock market recovered some of its losses later in the day, bond prices retreated.
9 But analysts said the combination of a second consecutive decline in monthly durable-goods orders and lackluster mid-October auto sales helped prop up the Treasury market.
10 A slowing economy and the implication of lower inflation and interest rates tend to bolster bond prices.
11 On the surface, the decline in September durable goods -- only 0.1% -- didn't appear very weak.
12 But orders for non-defense capital goods, a precursor of future plant and equipment spending, were off 5.6% after falling 10.3% in August.
13 Auto makers reported that mid-October sales were running at an annual rate of about 5.8 million units, far less than the 6.6 million units analysts had expected.
14 Taken together, the auto-sales and durable-goods reports confirmed perceptions that the economy is bogging down.
15 Although analysts don't expect the Federal Reserve to ease credit policy soon, reports like those yesterday help build the case for lower rates.
16 Now bond investors are looking toward next week's report from national purchasing managers and the government's October employment report as potentially prompting the Fed to lower rates.
17 The stock market's precipitous drop frightened foreign investors, who quickly bid the dollar lower.
18 But as stock prices recovered some of the early losses, so did the U.S. currency.
19 Although dealers said investors are becoming more bearish toward the dollar in the wake of the stock market's recent troubles and as the U.S. economy weakens, the dollar ended down only modestly.
20 In major market activity:
21 Bond prices rose.
22 The Treasury's benchmark 30-year bond gained nearly half a point, or about $5 for each $1,000 face amount.
23 The yield on the issue slipped to 7.89%.
24 The dollar retreated.
25 In late New York trading the currency was quoted at 1.8355 marks and 141.45 yen, compared with 1.8470 marks and 141.90 yen Monday.

The stock market ' s woes spooked currency traders but prompted a quiet little party among bond investors .
bond investors
how are these investors different?