NEW YORK (CNN/Money) - Treasurys failed to seek solid directions on Wednesday as a soggy batch of U.S. economic data dampened the outlook for future growth.
Shortly after 3:30 p.m. ET, the benchmark 10-year Treasury gained 1/32 of a point to 99-26/32 to yield 4.27 percent, down from 4.28 late Tuesday. The 30-year bond added 6/32 of a point to 104-21/32 to yield 5.05 percent, down from 5.07 late Tuesday. Bond prices and yields move in opposite directions.
The two-year note lost a tick to 100-16/32 to yield 2.48 percent, and the five-year bond fell 1/32 to yield 3.46.
While the durable goods and housing figures were not bad enough to prompt a shift in market expectations for steady interest rate hikes, the picture they painted was hardly that of a rapid economic expansion.
"The economy is generally slowing for a wide variety of reasons -- energy is one, but also the stimulus is wearing off," Alan Ruskin, research director at 4Cast Ltd, told Reuters.
"There's a lot of wishful thinking out there. I think the Fed is trying to talk up the economy to justify the tightening they want to do," he added.
Indeed, Fed officials were out in full force this week touting the nation's economic prospects and arguing that a recent spike in crude oil costs would not derail the recovery.
Fed Bank of Atlanta President Jack Guynn repeated the mantra on Wednesday. He noted the Fed would be flexible when considering the impact of high energy prices on the economy, but he said he believes solid growth will resume soon.
Yet the day's economic reports suggested otherwise.
New home sales slumped 6.4 percent, indicating the red-hot housing sector -- a major engine of growth -- is beginning to cool.
U.S. orders for durable goods did rise 1.7 percent in July when median forecasts had called for a 1.0 percent gain, but most of the rise derived from aircraft orders. Excluding those, orders were up just 0.1 percent, well below what some analysts had been expecting.
Business investment was stronger, with core capital goods orders excluding aircraft and defense up 0.6 percent, but this was still a slowdown from lofty growth seen earlier this year.
"Ex-transport is only barely up, and the decline last month was only marginally revised, so it's a bit disappointing, because it marks essentially the fourth month with no orders growth at all," Chris Low, chief economist at FTN Financial, told Reuters.
"The bottom line is that there is a tremendous amount of corporate caution again, and very likely that's related to the price of oil," he added.
Oil prices have retreated considerably in recent days, slipping to $43.47 a barrel from record highs above $49 last week.
In the currency market, the dollar weakened against the euro but gained against the Japanese currency, with the euro buying $1.2090, up from $1.2084 late Tuesday, and the dollar buying ¥110.12, up from ¥109.55.
-- from staff and wire reports
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