Oil price firmness, a sharp stock pricefall and widespread fear that the dollar has much more room to
decline sent bond prices tumbling, dealers said.
    The key 7-1/2 pct Treasury bonds of 2016 fell 1-3/32 points
to close at 95-1/32 and a 7.94 pct yield that was up 10 basis
points from Monday and was 1987's highest closing yield.
    "Investors threw in the towel today. The long bond seems
headed for eight pct within the next few days," a trader said.
That would correspond to a price of about 94-3/8.
    Treasury bill rates increased two to eight basis points.
Notes prices declined 1/8 to 3/4.
    Bond traders said the main negative is recent instability
of the dollar and growing feeling that even concerted central
bank support will not prevent a further drop in the dollar.
 Reuter
