Treasuries were little changed, headed for a weekly gain, before a government report

that may show new-home sales in the U.S. fell to near the lowest since 1991 and as

stocks in Europe and Asia declined. Returns on U.S. government debt for July turned

positive on speculation global losses in stocks will spur demand for the relative safety

of fixed-income securities. Merrill Lynch & Co.'s U.S. Treasury Master Index showed a

0.1 percent gain for the month, erasing a loss, after U.S. financial shares fell yesterday

the most in eight years. The yield on the benchmark 10-year note was little changed at

4.00 percent at 8:08 a.m. in New York, according to BGCantor Market Data. The 3.875

percent security due May 2018 traded at 98 31/32. The yield fell 9 basis points this

week. The yield on two-year notes was little changed at 2.60 percent, slipping 4 basis

points in the week. The MSCI Asia Pacific Index of regional shares tumbled 2.5

percent. Financial stocks in the Standard & Poor's 500 Index fell 6.7 percent as a

group yesterday, the third loss in the past three weeks greater than 5 percent. Market

is relatively unchanged to .25 worse in discount this morning.