Treasury prices rose Tuesday as investors dumped stocks over concerns about Japan's nuclear crisis and a weaker outlook for corporate earnings.
The 10-year Treasury note rose 75 cents per $100 invested in afternoon trading. Its yield, which moves in the opposite direction, fell to 3.50 percent from 3.59 percent late Monday.
Japan raised the severity level of its nuclear crisis, putting it on a par with the 1986 Chernobyl accident. Corporate earnings got off to a poor start when Alcoa Inc. reported sales that missed estimates. An unexpected decline in U.S. exports also lifted bond prices.
Treasurys held firm after an auction of three-year notes drew above-average demand. The Treasury Department paid a yield of 1.28 percent compared with 1.30 percent for the previous three-year note auction last month. Investors placed bids for 3.25 times the amount offered, above the average of 3.14 for three-year note sales.
The seven-year note's yield was 1.23 percent in late trading Tuesday.
The Treasury also plans to sell $21 billion in 10-year notes Wednesday and $13 billion in 30-year bonds on Thursday.
"It gets harder from here because the 10-year and 30-year are more susceptible to inflation expectations," said Josh Stiles, analyst at IDEAGlobal.com.
Investors will get a fresh look at inflation on Thursday when the producer price index comes out. The consumer price index is released on Friday.
The price of the 30-year bond rose $1.28 per $100 invested, while its yield fell to 4.59 percent from 4.65 percent late Thursday. The yield on the two-year note slipped to 0.75 percent from 0.84 percent.
The yield on the 3-month T-bill was unchanged at 0.04 percent. Its discount was 0.05 percent.