Treasurys rise after 2-year sale, economic reports

AP News
Posted: Aug 28, 2012 5:26 PM

Treasury prices rose slightly Tuesday after a pair of mixed economic reports and a U.S. government sale of two-year notes.

The 10-year Treasury note rose 15.6 cents for every $100 Tuesday. The increase in price pushed the yield down to 1.64 percent from 1.65 percent late Monday.

Early Tuesday, the Standard & Poor's/Case-Shiller index showed home prices rose in June from May in all 20 cities tracked. It was the second month in a row of increases, more evidence that the housing market is finally recovering.

In other economic news, The Conference Board reported that its closely-watched consumer confidence index fell to its lowest point since November 2011.

As part of a series of auctions this week, the U.S. sold $35 billion in two-year notes priced to yield 0.273 percent. Slightly before the auction, two-year notes already trading were yielding 0.272 percent. Demand was strong, with $3.94 in bids for every $1 offered.

The yield on the two-year notes settled late Tuesday at 0.26 percent, unchanged from late Monday.

The stock market also was little changed. The Standard & Poor's 500 index lost one point to 1,409 on one of the slowest trading days of the year.

Investors are mostly on hold as they wait for a speech by Federal Reserve Chairman Ben Bernanke in Jackson Hole, Wyo., on Friday. They will be listening for clues about whether the central bank is likely to launch a third round of bond-buying designed to lower interest rates and stimulate the economy.

In other trading Tuesday, the price of the 30-year bond rose 28.1 cents for every $100 invested. The yield fell 2.75 percent from 2.76 percent.

The yield on the 5-year note fell to 0.67 percent from 0.68 percent. The yield on three-month T-bill rose to 0.10 percent from 0.09 percent.