The dollar and U.S. Treasuries rose on Tuesday, lifted partly by news the Thai army took control of Bangkok and announced it would set up a commission to reform the constitution in an apparent coup, according to Reuters. On Wall Street, stocks fell after Internet company Yahoo Inc. warned about its quarterly outlook, and, to a lesser extent, due to uncertainty caused by the Thai news. As tanks surrounded Thailand's Government House, Prime Minister Thaksin Shinawatra, who was in New York for the United Nations General Assembly, declared a state of emergency. "The baht is being sold off. There are some safe-haven bids into U.S. Treasuries and to a lesser extent into euro zone government bonds. At the moment people are not clear with the details," said Michael Every, a bond strategist with RBC Capital Markets, in London. U.S. Treasury bonds rose on a flight-to-quality bid after the initial reports from Thailand, extending gains after surprisingly soft U.S. inflation data, which reinforced expectations the Federal Reserve would keep interest rates on hold when it meets on Wednesday. The benchmark 10-year U.S. Treasury note rose 16/32, with the yield at 4.7467 percent, while the 2-year Treasury note was up 3/32, its yield at 4.8181 percent. The 30-year U.S. Treasury bond was up 29/32, with the yield at 4.8644 percent. In U.S. equity trading, the Nasdaq Composite stock index fell 1.4 percent, partly due to the Thai news but mostly hampered by the Yahoo warning. It also hurt shares of Yahoo rival Google Inc. The Dow Jones industrial average was down 61.23 points, or 0.53 percent, at 11,493.77. The Standard & Poor's 500 Index fell 8.33 points, or 0.63 percent, to 1,312.85. The Nasdaq Composite Index was down 30.74 points, or 1.37 percent, at 2,205.01. The fall in investor sentiment hurt European stocks, with the FTSEurofirst 300 down 0.6 percent to 1,366 points. In Tokyo, the Nikkei average closed flat as shares of major exporters rose but a downgrade weighed on pharmaceutical stocks. The Thai baht staged its largest one-day fall in three years after the Thai news, which led to a broad-based decline in a number of Asian currencies. The Japanese yen retained most of the day's gains against the euro after a European official overnight said markets had not yet digested policy-makers' comments at the weekend G7 meeting that the yen should rise against the euro. Against the Thai baht, the dollar rose to 37.78 baht, up from 37.305 and more than 1.3 percent on the day in the largest daily rise since October 2003. The dollar was up against a basket of major trading-partner currencies, with the U.S. Dollar Index up 0.20 percent at 85.97 from a previous session close of 85.800. The euro was down 0.21 percent at $1.2674 from a previous session close of $1.2701. Against the Japanese yen, the dollar was down 0.25 percent at 117.69 from a previous session close of 117.98. U.S. crude oil futures abruptly turned lower at midday Tuesday, ending a two-day bounceback as speculators sold amid technically weak chart signals and ample supplies. But volume was thin, adding to the volatility ahead of the release of weekly government inventory data on Wednesday, which are forecast to show stock builds on distillates and gasoline and a draw in crude supplies. October crude was down $1.62 at $62.12 per barrel on the New York Mercantile Exchange.
