Bond bubble fear returns as investors flee stocks

NEW YORK – Maybe bonds aren't so dull after all.

Bad economic news sent investors out of stocks and into U.S. Treasurys this past week, extending a rally that has defied some of Wall Street's best minds, and, some say, logic. Treasury bonds maturing in 20 years or more have returned 2.1 percent so far this year. By contrast, stocks in the Dow Jones industrial average have lost 2 percent.

The question now: Is it too late to jump into the great government bond bonanza?

To bulls, the rally is still in its early stages. They say the weak economy will cause stocks to keep falling and people to seek the safety of U.S. government debt. Reports this past week of unexpectedly high unemployment claims and a manufacturing slowdown in the mid-Atlantic region helped bolster their case.

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