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YIELDS DECLINE ON TREASURY BILLS

Interest rates on short-term Treasury securities fell in Monday's auction to the lowest levels of the year.

The Treasury Department sold $12.1 billion in three-month bills at an average discount rate of 5.64 percent, down from 5.76 percent last week. Another $12 billion was sold in six-month bills at an average discount rate of 5.80 percent, down from 5.91 percent.

The new discount rates understate the actual return to investors -- 5.82 percent for three-month bills with a $10,000 bill selling for $9,857.40, and 6.07 percent for a six-month bill selling for $9,706.80.

In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 6.37 percent last week from 6.39 percent the previous week.

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