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YIELDS INCREASE ON TREASURY BILLS

Interest rates on short-term Treasury bills rose in Tuesday's auction with six-month bills climbing to the highest level in four weeks.

The Treasury Department auctioned $10 billion in three-month bills at a discount rate of 4.905 percent. Another $10 billion in six-month bills was auctioned at a discount rate of 4.770 percent.

The new discount rates understate the actual return to investors -- 5.036 percent for three-month bills with a $10,000 bill selling for $9,876.00, and 4.955 percent for a six-month bill selling for $9,758.90.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, rose to 4.80 percent last week from 4.72 percent.

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