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NEW YORK (AP) - Treasury prices rallied Monday on concerns that the sale of Bear Stearns Cos. to JPMorgan Chase & Co. may be followed by further unraveling in the financial system.
JPMorgan bought Bear Stearns for just $2.21 a share. A run on Bear Stearns late last week by panicky investors dealt a fatal blow to the brokerage's liquidity and forced the transaction.
The bond market overall was relieved by the emergency sale, which was supported by the Federal Reserve. Among other benefits, it will allow the Fed to control Bear Stearns' extensive bad mortgage debt and should put an end to Bear Stearns' penchant for creating high-risk debt instruments.
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