Treasury prices rise after 10-year note auction

AP News
Posted: Mar 09, 2011 5:20 PM
Treasury prices rise after 10-year note auction

Treasury prices rose Wednesday after the government saw strong bidding at an auction of debt.

The Treasury sold $21 billion in 10-year notes Wednesday afternoon at a yield of 3.49 percent. Investors placed bids worth 3.32 the amount up for sale, better than the 3.08 average over the last year. It's also the best show of demand since April.

Foreign buyers appeared to play a role in the stronger bidding. A group of investors that includes foreign central banks took 53 percent of the 10-year notes sold, compared with 47 percent over the last year.

The conflict in Libya has led some investors to seek safety in Treasurys. That's helped lower long-term interest rates in recent weeks. Before the uprising started in mid-February, 10-year yields traded as high as 3.74 percent.

In afternoon trading, the 10-year note is up 68.8 cents. The higher price lowered the yield to 3.47 percent from 3.54 percent late Tuesday.

The 30-year bond rose $1, lowering its yield to 4.61 percent from 4.66 percent. The two-year yield slipped to 0.70 percent from 0.72 percent.

The Treasury's debt auction Wednesday was the second of three this week, expected to raise a total of $66 billion. The last comes Thursday with the sale of $13 billion in 30-year bonds.

The yield on the three-month T-bill fell to 0.09 percent from 0.10 percent. The discount was 0.09 percent.