Treasuries Fall as Rising U.S. Stocks Reduce Appeal of Debt

Treasury notes fell as U.S. stock indexes gained, reducing investor interest in the safety of government debt. Equities rose as Merrill Lynch & Co. sold most of its commercial finance business to General Electric Co. Treasuries are poised for their best year since 2002 on expectations the Federal Reserve will keep cutting interest rates next year to stop a housing meltdown from triggering a recession. The Fed cut its target rate for overnight loans between banks by 1 percentage point this year to 4.25 percent. U.S. and European central banks also added money to the financial system to try to revive bank lending. Residential home prices are heading toward their first annual decline since the Great Depression, according to the National Association of Realtors.