Treasury prices rise modestly after strong demand seen for new 10-year notes

Treasurys rise modestly amid strong auction demand

NEW YORK — Treasury prices rose modestly Wednesday after a strong showing for the government’s latest auction of 10-year notes.

The price of the 10-year note rose 1/32 to 101 6/32, while its yield remained unchanged at 3.48 percent. Treasurys had been falling through much of the day before rallying after the auction was completed.

The government auctioned off $20 billion in 10-year notes. The bid-to-cover ratio, a measure of demand, was 2.77 percent, much stronger than the 2.49 percent seen for similar notes auctioned in August.

The government has one more auction planned for the week, a sale of $12 billion in 30-year bonds on Thursday.

The 30-year bond was flat at 102 29/32. Its yield fell was unchanged at 4.33 percent.

Treasurys had been slipping throughout most of the day amid a rally in the stock market. As stocks move higher, investors typically sell safer investments such as government bonds.

Traders were moving into stocks amid fresh hopes that an economic rally would translate into a boost in profits for major industrial firms. Materials producers were also getting a boost from rising commodity prices.

In other trading, the price of the two-year note rose 1/32 to 100 4/32. Its yield was unchanged at 0.93 percent.

The yield on the three-month T-bill rose to 0.14 percent from 0.13 percent.

The cost of borrowing between banks dipped. The British Bankers’ Association said the rate on three-month loans in dollars — the London Interbank Offered Rate, or Libor — was unchanged at 0.30 percent.