The Treasury Department auctioned off inflation-protected securities at a negative yield Thursday, reflecting strong demand for U.S. debt and investors' belief that inflation will rise in the coming years.
The government sold $13 billion of 10-year Treasury Inflation-Protected Securities, or TIPS, priced to yield -0.089 percent. It was the second time TIPS have sold with a negative yield.
Long-dated Treasurys ended the day nearly unchanged, after trading at higher prices for most of the day. Treasury prices rose early as worrisome signals from overseas raised fears that a global slowdown will hurt higher-risk investments.
Stocks, oil and metals prices all fell Thursday after a Chinese manufacturing index suggested that factory activity there is slowing. China has given the global economy crucial momentum since the financial crisis of 2008.
A separate survey measuring Europe's factory and service sectors also indicated contraction. As they sold higher-risk investments, traders moved money into Treasurys.
By late afternoon, the yield had bounced back. The yield on the 10-year Treasury note was 2.29 percent at 4:15 p.m. Eastern, unchanged from late Wednesday. It had fallen as low as 2.25 percent earlier Thursday. Its price rose 12.5 cents for every $100 invested.
The price of the 30-year Treasury bond rose 31.25 cents, pushing its yield down to 3.37 percent from 3.38 percent late Wednesday.
The yield on the two-year Treasury note rose to 0.38 percent from 0.36 percent late Wednesday.
The yield on the three-month T-bill was unchanged at 0.08 percent.
The yield on the 10-year Treasury note had risen briefly Thursday morning after the government said that new claims for unemployment benefits fell last week to a four-year low.