By Anora Mahmudova, MarketWatch

Investors flock to bond markets as stocks, oil slide

Treasury prices rallied for a third consecutive session, pushing yields to a 12-month low on Monday, as investors bid up safe assets such as bonds and gold as stocks skidded yet again.

Some analysts pointed to widening credit default spreads for banks as the trigger for Monday's moves.

"Market concern is increasingly shifting from crude prices to credit default swap spreads on major banks, thanks to a big widening of Deutsche (A2/BBB+) last week. With bank CDS spreads wider this morning, equities are broadly weaker and Treasuries stronger," wrote Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in emailed notes.

European equities were down more than 2% while the Dow industrials fell more than 300 points (http://www.marketwatch.com/story/dow-futures-drop-200-points-setting-wall-street-up-for-an-ugly-start-2016-02-08)shortly after the open.

Read:Why a selloff in European banks is ominous (http://www.marketwatch.com/story/why-a-selloff-in-european-banks-is-ominous-2016-02-07)

The yield on the 10-year Treasury note -- the Treasury market's benchmark -- fell 11 basis points to 1.736%, the largest one-day decline since July 6, 2015. Treasury yields have dropped more than 50 basis points since the start of the year to the lowest level since Feb 2, 2015.

Some analysts noted that the pressure on Treasury yields is not only coming from domestic concerns about the economy and monetary policy but also from action in global bond markets.

"EM weakness, global commodity malaise, and more and more yields falling into negative territory [are] forcing portfolio managers to reach for yield. All of this benefits the US Treasury market and depending whether the Fed stands firm on its willingness to tighten or not, the curve flattens or steepens," wrote Dan Brierley, head of US Treasury trading at Jefferies LLC.

The yield on the 30-year bond , known as the long bond, fell 12.3 basis points to 2.559% from 2.682% on Friday.

The yield on the two-year note closed 6.4 basis points lower at 0.662%, its lowest level since October. Monday's decline was the largest one-day drop since Oct. 14, 2015

In Europe, the benchmark 10-year German yield fell 8.3 basis points to 0.216% from 0.299% on Friday, and is at its lowest level since April 28. Meanwhile, Japan's 10-year bond is yielding at 0.032%.

(END) Dow Jones Newswires

February 08, 2016 16:11 ET (21:11 GMT)