US officials say European security concerns higher

WASHINGTON, Dec 22 (Reuters) The approach of the year-end holidays has raised general concerns about a possible attack in Europe, but there is no evidence of anything specific or imminent, US officials said yesterday.

US Treasury bond prices rallied yesterday afternoon, in part boosted by an ABC News report that a terror attack over the holidays in London was highly likely and also lifted by a weak Philadelphia Fed business activity index earlier, bond strategists said.

''Terror story from ABC, plus lousy Philly Fed,'' were the reasons for the Treasury market rally, said T J Marta, fixed income strategist with Royal Bank of Canada Capital Markets in New York. Other bond traders in New York and Chicago also cited the report as a factor helping to drive the market.

''There is more concern,'' said a US intelligence official, who asked not to be identified, said of a possible attack in Europe.

''But there's nothing with any specificity in terms of location or the broader holiday season.'' A second official said worries appeared to be little different than security concerns during the Christmas and New Year's holidays of years past.

''It's not like in August when all the indicators were pointing the same way,'' said the official, referring to an alleged plot to bomb trans-Atlantic flights from Britain to the United States.

A number of media reports in recent weeks have suggested increasing dangers of an attack in Europe.

REUTERS PKS RN0502