In the face of improving economic numbers, U.S. government bonds seemed like the wrong place to be.
Traders fled the safety of bonds and bought riskier investments such as stocks after the unemployment rate Friday dropped to its lowest level in three years.
The jobs report provided hope that the U.S. economic recovery is picking up steam. Stocks generally reflect the fortunes of companies and an improving economy portends higher stock prices. Bonds have a fixed income. However, the uncertainty in recent months from the European debt crisis and a shaky economic recovery in the U.S. have led traders to buy bonds despite their current low yields and give up the potential of higher returns in the stock market.
On Friday, the price of the benchmark 10-year Treasury note dropped $1.84 for every $100 invested, sending its yield up to 1.92 percent from 1.82 percent late Thursday.
The 30-year bond plummeted $2.34, sending its yield up to 3.12 percent from 3 percent.
The United States added 243,000 jobs last month, far more than economists expected and the most since last April. That sent the U.S. unemployment rate to 8.3 percent, the lowest in three years.
Results from a survey from the Institute of Supply Management helped boost the jobs report. Non-manufacturing businesses such as restaurants, retailers, and construction companies said business activity, new orders, exports and imports all picked up. Inventories also shrank more quickly, indicating solid sales.
The survey results were especially heartening because the service sector employs 9 out of 10 U.S. workers. Though the sector had been growing for two straight years, hiring was stagnant. However, companies overcame their reluctance to hire in January, pushing the employment index up to 57.4 percent from 49.8 percent.
In the shorter-maturity bond markets, the yield on the two-year note remained flat at 0.23 percent. The three-month T-bill also remained flat at 0.08 percent.