A rally in the Treasury market came to an end Wednesday as yields rose for the first time in a week.
Surging stock markets in Europe and the U.S. along with an auction of 10-year Treasury notes weighed on prices for ultra-safe Treasurys. The price of the 10-year Treasury note dropped 40.6 cents for every $100 invested. The yield rose to 2.04 percent, up from 1.98 percent late Tuesday.
Renewed worries over Europe's debt crisis sent traders out of stocks and into Treasurys on Tuesday. The demand pushed the 10-year Treasury yield below 2 percent for the first time since early March.
The recent drop in yields means cheaper borrowing costs for the federal government. At its auction of 10-year notes Wednesday, the Treasury sold $21 billion at a yield of 2.04 percent.
But the lower yield also resulted in weak bidding from bond buyers. Investors placed bids for 3.08 times the amount up for sale, versus a four-month average of 3.23.
In other Treasury trading, the 30-year bond dropped $1.12 for every $100, while its yield fell to 3.19 percent from 3.13 percent. The yield on the two-year note inched up to 0.30 percent from 0.29 percent.
In the market for short-term bills, the three-month T-bill paid a yield of 0.08 percent.