Worries over Europe's debt crisis pushed U.S. government bonds higher Tuesday.
Bond prices rose and their yields fell in afternoon trading after Moody's Investors Service dropped Ireland's credit rating to junk. The downgrade makes Ireland the third European country with such a low grade. Moody's cut Portugal's rating to junk last week and Greece's earlier this year.
The price of the 10-year Treasury note rose 31.2 cents for every $100 invested. The higher price lowered the yield down to 2.88 percent from 2.93 percent late Monday. Long-term interest rates are near their lowest levels this year.
Investors have also been concerned that Italy, Europe's third-largest economy, could become the next country in that region to need help managing its debts. In times of crisis, traders often park their cash in Treasurys, which are still seen as one of the world's safest investments.
In Tuesday's debt auction, the Treasury sold $32 billion in three-year notes at a yield of 0.67 percent. Investors placed bids for 3.22 times the amount up for sale, a slightly weaker show of demand than in the last four auctions.
In other trading, the 30-year bond rose 46.8 cents, while its yield fell to 4.18 percent from 4.21 percent late Monday. The yield on the two-year note was trading at 0.36 percent, the same as the day before.
The three-month Treasury bill paid a yield of 0.02 percent, the same as the day before. Its discount was 0.03 percent.