Treasurys fall as economic hopes fuel riskier bets

AP News
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Posted: Jan 05, 2012 5:05 PM
Treasurys fall as economic hopes fuel riskier bets

U.S. Treasury prices edged lower Thursday in seesaw trading as good news about the U.S. economy drew cash into riskier investments.

The yield on the 10-year Treasury note rose to 2 percent late Thursday from 1.95 percent just after 10 a.m. Rising yields reflect lower demand for ultra-safe Treasurys.

The yield edged up from 1.98 percent late Wednesday, while the price fell by 16 cents per $100 invested.

The economic outlook brightened early Thursday with news that that new applications for unemployment benefits fell last week for the fourth time in five weeks. The four-week average, which evens out weekly fluctuations, fell to the lowest since June 2008.

Treasurys had gained earlier on renewed fears about instability in Europe's financial markets. Investors seeking safe place to stash their money drove Treasury prices higher, pulling yields lower.

By late Thursday, the positive economic news had overshadowed worries about the debt crisis in Europe. Stocks bounced back from early losses to close nearly flat.

Also Thursday, the Treasury Department announced that it will auction off $66 billion in notes and bonds next week. The government will sell $32 billion of three-year notes next Tuesday, $21 billion of 10-year notes next Wednesday and $13 billion of 30-year bonds next Thursday.

The price of the 30-year Treasury bond fell 75 cents for every $100 invested, pushing its yield up to 3.07 percent from 3.03 percent late Wednesday.

The yield on the two-year Treasury note was unchanged at 0.26 percent. The three-month Treasury bill paid a yield of 0.01 percent.