Treasury prices fell slightly as panic buying of U.S. bonds subsided along with fears over Europe.
On Tuesday, the benchmark 10-year Treasury price fell 31.2 cents for every $100 invested, pushing its yield up to 1.97 percent from 1.94 percent late Monday.
European fears reached fever pitch Monday after the Dutch government resigned after failing to reach a compromise on making painful budget cuts. Investors fled to Treasury bonds and the 10-year yield touched 1.91 percent, the lowest level since Feb. 6.
On Tuesday the fears receded a little, but investors were aware that the issues haven't been resolved. They continued to demand higher rates from Spain and Italy in auctions of new debt.
By contrast, the Treasury Department raised $35 billion from selling 2-year notes at a yield of 0.27 percent, lower than the 0.34 percent that last month's auction fetched. Demand outstripped supply by 3.76 times, which was higher than the 3.61 times averaged in the last four auctions.
The yield on the 30-year Treasury bond rose to 3.13 percent from 3.08 percent late Monday. Its price fell 68.7 cents per $100 invested.
The yield on the two-year Treasury note was flat at 0.27 percent, while the yield on the three-month Treasury bill rose to 0.08 percent, from 0.07 percent.