Treasurys slide after weak response to 30-year long bond auction, upbeat weekly jobs report

Treasurys fall on weak demand at 30-year auction

NEW YORK — Treasury prices fell Thursday after weak demand at an auction for 30-year bonds unnerved investors.

The Treasury Department was forced to pay greater interest than had been expected in an auction of $14 billion in 30-year notes. The government has been issuing debt at a record pace to finance the economic stimulus and financial rescue efforts.

Demand for the safety of government debt also fell as new applications for unemployment benefits dropped last week to the lowest level in 14 weeks. Retail results also improved as Wal-Mart Stores Inc. and other stores reported April sales figures that beat expectations.

The slide in prices also came ahead of the government’s release of its “stress tests” on the nation’s 19 largest financial companies. The government said 10 of 19 have to come up with more capital but news reports in recent days had quelled some worries on Wall Street about how much would have to be raised.

The benchmark 10-year Treasury note fell 31/32 and its yield jumped to 3.27 percent from 3.16 percent late Wednesday.

The 30-year bond tumbled 2 25/32 and its yield jumped to 4.26 percent from 4.11 percent.

The two-year note slipped 2/32 while its yield was flat at 0.97 percent.

The yield on the three-month Treasury bill was flat at 0.17 percent from Wednesday. The discount rate was 0.18 percent.