Government bond prices rose Tuesday on more troubling news about Europe's debt woes, which led to a successful sale of new two-year notes.
The price on the 10-year Treasury note rose 9.37 cents per $100 invested in Tuesday trading. Its yield fell to 3.11 percent from 3.13 percent late Monday.
Treasury sold $35 billion in two-year notes, which yielded 0.56 percent, the lowest in since a November auction. It was the first of a three-part debt sale this week.
The yield on the two-year note fell to 0.50 percent from 0.52 percent. The yield on the 30-year bond fell to 4.25 percent from 4.27 percent. Its price rose 37.5 cents.
A barrage of bad news out of Europe led investors to keep buying U.S. Treasurys. Moody's warned that a restructuring of Greece's debt would be considered a default and would hurt the credit ratings of Greece and other debt-laden European countries.
The three-month T-bill paid a yield of 0.04 percent, unchanged from Monday. Its discount was 0.05 percent.