NEW YORK (CNN/Money) - U.S. Treasurys rose Thursday on news that traces of anthrax were found in mail located at the U.S. Federal Reserve in Washington, re-awakening fears sparked by deadly doses of anthrax sent through the mail last fall.

Two-year Treasury notes gained 4/32 of a point to 100-7/32, yielding 3.25 percent. Five-year notes gained 7/32 to 99-8/32, yielding 4.54 percent.

Benchmark 10-year notes climbed 9/32 of a point to 97-21/32, yielding 5.18 percent, down from 5.21 percent late Wednesday and 30-year bonds gained 13/32 to 96-6/32 to yield 5.64 percent, down from 5.66 Wednesday.

"That kind of just spooked the market," said Jim Caron, fixed-income strategist at Merrill Lynch. "Also, the equity market's sagging now ... which is continuing to put a bid into the (bond) market as well."

Two of the biggest equity winners from Wednesday's rally, Cisco and General Electric, gave back some of their gains Thursday, leading the broader markets lower.

June Treasury bond futures at the Chicago Board of Trade jumped half a point on the news before trimming gains, but traders said the market was technically poised for gains after Wednesday's steep selloff on the back of a sharp rally in stocks.

In the currency market, the dollar weakened against the euro and the yen. The euro purchased 90.90 U.S. cents, up from 90.42 cents late Wednesday. The dollar bought ¥128.38, down from ¥128.77 Wednesday.  

-- from staff and wire reports