NEW YORK — Bond prices dropped sharply Tuesday, hammered by persistent concern about a wave of new government issues flooding the market.
The Treasury's closely watched 30-year issue tumbled 1.31 point, or about $13 for every $1,000 in face value. That catapulted its yield, which moves inversely to its price, from to 9.82% from 9.66% late Monday--the highest level since late 1985, according to analysts.
Corporate and municipal bonds declined 5/8 point to 3/4 point.
Investors continued to question whether the market could handle the onslaught of new bonds and notes to be offered as a result of President Reagan signing a bill Tuesday afternoon raising the national debt limit, analysts said.
The government last week postponed the sale of $12.8 billion of three- and six-month bills and $23.25 billion of "mini-refunding" notes. In addition, another $12.8 billion of three- and six-month notes and $9.25 billion of one-year bills are scheduled to be auctioned later this week.