Bond yields fell near their lows for the year Thursday as more weakness in the U.S. job market and a stock market slump led investors to put money in lower-risk investments.
The yield on the 10-year Treasury note fell to 2.90 percent in afternoon trading from 2.98 percent late Wednesday. That's just above its low for the year of 2.88 percent, reached on June 16. The price rose 68.8 cents per $100 invested.
Strong demand for bonds pushes their prices higher and their yields lower.
Treasury prices also moved higher following a successful auction of 30-year inflation-protected Treasury bonds. More than three bids were received for every bond sold. That's better than the 2.5 bids received at the last auction and a sign of strong interest in the bonds among investors.
Dour economic news and a sharp drop in stocks led traders to put more money in bonds. Claims for unemployment benefits jumped more than expected last week, and Fed Chairman Ben Bernanke warned Wednesday that U.S. economic weakness could continue longer than anticipated. The Fed lowered its forecast for economic growth this year and next.
"It's an onslaught of negative news," said Jason Rogan, director of U.S. Treasury trading at Guggenheim Partners, a New York-based brokerage.
The yield on the two-year Treasury note fell to 0.35 percent from 0.38 percent. The yield on the 30-year bond fell to 4.17 percent from 4.22 percent. The bond's price rose 78.1 cents for every $100 invested.
The yield and the discount on the three-month T-bill were both 0.01 percent.