Treasury prices fall as consumer confidence rises, 5-year note auction sees lukewarm demand

Treasurys decline as consumer confidence rebounds

NEW YORK — Treasurys retreated Tuesday, pushing yields higher, after a report showed consumer confidence is on the rebound.

The Conference Board said its barometer of consumer confidence rose to the highest level since November. The reading beat economists’ expectations, and encouraged investors to pull money out of safer assets.

Stocks ended moderately lower but well off their worst levels of the day. The Dow Jones industrial average slipped 8.05, or 0.1 percent, to 8,016.95.

Investors also sold Treasurys after the government auctioned $35 billion in five-year notes amid lukewarm demand. Bidding levels were higher than average, but prices had to be reduced to lure buyers.

The Federal Reserve has been buying Treasurys even as the government issues large amounts of debt, which can lead to lower prices and higher rates. The yield on the 10-year Treasury note initially tumbled last month after the Fed said it would purchase up to $300 billion in Treasurys over six months, but it has since climbed back.

The Fed will assess the economy and the market after its two-day meeting concludes Wednesday afternoon. The central bank is widely expected to keep rates in a range of zero to 0.25 percent, but investors are looking to see whether policymakers will step up purchases of Treasurys.

On Tuesday, the 10-year note fell 27/32 to 97 26/32. Its yield jumped to 3.01 percent from 2.91 percent late Monday.

The 30-year bond 1 31/32 to 92 3/32 and its yield rose to 3.96 percent from 3.83 percent, according to BGCantor Market Data.

The two-year note fell 4/32 to 99 27/32 and its yield rose to 0.95 percent from 0.88 percent.

The yield on the three-month Treasury bill slipped to 0.11 percent from 0.12 percent. The discount rate was 0.12 percent.

The cost of borrowing between banks edged to a new low. The London Interbank Offered Rate, or Libor, on three-month loans in dollars fell to 1.04 percent from 1.05 percent.