Rising demand for ultra-safe investments pushed the yield on the 10-year Treasury note below 2 percent Friday. The yield has not been that low consistently since late February.
Traders dumped debt issued by financially-strapped European governments including Italy and Spain.
As they fall out of favor with bond investors, Italy and Spain are forced to pay higher yields on the bonds they issue. Rising borrowing costs weaken their fiscal footing. Europe's bailout programs can't afford a massive rescue of Spain or Italy.
As traders sold riskier investments such as stocks, they bought Treasurys. The yield on the 10-year Treasury note fell to 1.98 percent late Friday from 2.05 percent late Thursday. Its price rose 62.5 cents for every $100 invested.
The price of the 30-year Treasury bond rose $1.59 for every $100 invested, pushing its yield down to 3.13 percent from 3.21 percent late Thursday.
The yield on the two-year Treasury note fell to 0.27 percent from 0.28 percent late Thursday. The yield on the three-month Treasury bill stayed at 0.09 percent.