NEW YORK (CNNmoney) - One day after the Treasury Department said it will stop selling it, the 30-year bond continued to climb Thursday, due to weak data on manufacturing and concerns about the scarcity of the 30-year vehicle.
Just before 3 p.m. ET, the 30-year bond gained 1-1/32 to 108-30/32. Its yield, which moves inversely to its price, fell to 4.80 percent Thursday, near its all time low, from 4.88 percent at Wednesday's close.
The 10-year note gained 3/32 to 106-4/32 with a yield of 4.22, down from 4.28 percent Wednesday's.
Shorter-dated Treasurys dropped Thursday. The two-year note slipped 6/32 with a yield of 2.48 percent. The five-year note dropped 5/32 with a yield of 3.51 percent.
The Treasury department said the 30-year bond does not meet the government's cash needs and discontinuing it will save taxpayers money by cutting borrowing costs.
"The market reacted exactly the way they wanted it to, which was to flatten the yield curve," said Lara Rhame, economist with Brown Brothers Harriman. "I think the point is clear: Policy makers are going to do whatever they can to help the Fed. The rate cuts that the Fed is putting through are only hitting the short curve; they're only psychological."
The Fed has cut rates nine times this year in a bid to ward off a recession. Lower rates tend to spur the economy and corporate profit growth, and so usually boost stock prices. But lower rates also can fuel inflation, which worries investors who tie up money for long periods in the bond market.
In the first comprehensive look at the economy since October, U.S. manufacturing activity shrank for the fifteenth straight month in October, the nation's purchasing managers said Thursday.
The report only cemented the case for another interest rate cut by the Fed next week.
Additionally, the Commerce Department reported that personal spending dropped 1.8 percent in September after rising a revised 0.3 percent in August. It was the largest drop in personal spending since a 1.8 percent drop in August 1987.
In addition, new jobless claims fell to 499,000 from a revised 509,000 the week earlier. Economists expected 508,00 new claims, according to Briefing.com.
In the currency market, the dollar fell. The euro purchased 90.36 cents Thursday, up from 89.99 cents Wednesday. The dollar bought ¥121.96, down from ¥122.43 yesterday.
-- from staff and wire reports 
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