U.S. Treasurys prices fell Thursday on better jobs news and renewed hope Spain can avoid a bailout.
Ten-year U.S. Treasury notes fell 34 cents per $100 invested. The yield rose to 1.89 percent from 1.83 percent late Wednesday.
Investors were encouraged by a U.S. Labor Department report that unemployment claims edged lower in the week ending May 5. That helped push down a four-week average for claims for first time since March. That closely-watched average is now at a level suggesting that the unemployment rate will continue to fall.
The unemployment rate edged down to 8.1 percent in April.
Yields on Spanish bonds fell after the government said it would take over Bankia SA, the country fourth-largest bank. That eased investor fears that the country might become the next victim of the European debt crisis. Yields fell in France, and were unchanged in Italy.
In the U.S, demand was strong at an auction of 30-year bonds. There were $2.73 in bids for every $1 of bonds sold.
The government sold $16 billion of the bonds at a yield of 3.09 percent. Over the past ten years, the yield on the 30-year bond has mostly traded above 4 percent. During the financial crisis in 2008, the yield sank as low as 2.55 percent.
In other Treasury trading, the price of 30-year bonds already in circulation fell 69 cents for $100 invested. The yield rose to 3.06 percent from 3.03 percent Wednesday. The yield on the two-year note fell to 0.26 percent from 0.28 percent.
The yield on the three-month T-bill was unchanged at 0.10 percent.