NEW YORK (CNN/Money) - Treasurys gained ground Wednesday afternoon, as investors breathed a sigh of relief that the second day of the week's three-day, $60 billion Treasury refinancing went more smoothly than Tuesday's auction.

The Treasury sold $18 billion in five-year notes in an auction at 1:00 p.m. ET Wednesday. The Treasury will sell $18 billion in ten-year notes on Thursday, completing this week's $60 billion auction.

The auction drew bids for 2.48 times the amount available, a far better bid-to-cover ratio than the $24 billion three-year note auction generated on Tuesday. Bid-to-cover refers to how much interest there is in a new issue compared with the amount being offered.

Tuesday's auction drew bids for just 1.32 times the amount on offer, far below the 1.96 bid-to-cover ratio racked up at the last sale of three-year notes in May.

As a result, bond prices fell sharply Tuesday, with a surprisingly strong Institute for Supply Management service sector reading adding to the slide, as investors again expressed worries about a rise in interest rates.

But bonds snapped back Wednesday.

At around 4:00 p.m. ET, the benchmark 10-year note rose 29/32 of a point in price to trade at 94-26/32, pushing its yield down to 4.28 percent from 4.42 percent late Tuesday afternoon. The 30-year bond gained 1-25/32 points in price to 101-30/32, pushing its yield down to 5.24 percent from 5.38 percent late afternoon Tuesday.

The five-year note added 12/32 of a point in price to trade at 97-23/32, yielding 3.14 percent. The two-year note gained 4/32 of a point in price to 99-16/32, yielding 1.76 percent.

"The huge selloff has already happened," Andrew Harding, director of taxable fixed income at Cleveland-based Armada Funds told Reuters. "After two weeks of pretty horrendous bond action, we're due for some relief."

Treasury prices have eroded recently amid gains in the stock market and signs of a pickup in the economy, all of which could lead to higher interest rates, which would hurt long-term investments.

Meanwhile, the dollar drew some support as the stock markets partially reversed losses.

The dollar stood at ¥120.17, up from ¥119.89 late Tuesday afternoon, while the euro bought $1.1349, down from $1.1373 late Tuesday.

"The weakening stocks over the last few days have hurt the dollar a little bit, while [on Tuesday] we saw a good economic number that the dollar basically ignored," said Ken Agostino, senior trader with Gain Capital in Warren, N.J.  

-- Reuters contributed to this report.