NEW YORK (CNN/Money) -
Treasury prices rallied Thursday, extending the morning's gains after news of soft employment data and stabilizing crude oil prices.
At around 3:40 p.m. ET, the benchmark 10-year Treasury rose 12/32 of a point to 100-7/32 to yield 4.22 percent, down from 4.27 late Wednesday. The 30-year bond added 1/2 of a point to 105-8/32 to yield 5.01 percent, down from 5.05 percent late Wednesday. Bond prices and yields move in opposite directions.
The two-year note edged higher 4/32 of a point to 99-25/32 to yield 2.49 percent, and the five-year bond gained 6/32 to 100-12/32 to yield 3.42 percent.
Much of the recent downward tug on bond prices has come from a slide in crude oil prices after record highs were reached on Friday.
Crude prices fell again Thursday, but they clawed back from an early low below $43 a barrel to $43.10 at the close of trading, rekindling concern about the impact of high energy prices on the U.S. economic recovery and the global economy in general.
Investors made a flight to the safety of Treasurys following attacks in Najaf, Iraq, and the nearby town of Kufa, which killed up to 74 people and wounded more than 300.
Two job-related reports were both weaker than expected, creating a few new worries about the potential outcome of the August U.S. payrolls report, set for release on Sept. 3.
Initial jobless claims for the week ended Aug. 21 rose to 343,000 from a revised 333,000, pushed up in part by the chaos that followed Hurricane Charley in Florida.
A Labor Department spokesman said about half the rise in claims was caused by damage from the hurricane that battered parts of Florida and the Carolinas earlier this month. A similar Charley factor is likely next week.
Weekly claims have mostly hovered in the 330,000 to 350,000 range for the past three months, consistent with moderate monthly jobs creation around 150,000, dealers said.
Meanwhile, the Conference Board said its index of help-wanted ads dipped to 37 in July from 38 in June.
The report surveys ad volume in dozens of newspapers across the United States. But economists contend that the shift in advertising to Internet sites, and other changes in the hiring process, has made the index less reliable.
"The strong historical relationship between the level of the help-wanted index and the year-on-year growth of payroll employment has broken down completely," said Steven Wood, economist at Insight Economics.
Most dealers were hesitant to establish big, new positions before Friday's revised second-quarter gross domestic product (GDP) report. Thin summertime trading was said to be dominated by mortgage-related firms.
Real GDP is expected to be revised lower from the original 3.0 percent, mostly based on the record high U.S. trade deficit posted for June.
Fed Chairman Alan Greenspan, who has been busy writing letters to Congress this week on various topics, will speak in Jackson Hole, Wyo., on Friday.
Greenspan is slated to speak on the economic impact of global demographic changes at the Kansas City Fed's annual economic symposium.
In the currency market, the dollar fell against the euro and the Japanese yen, with the euro buying $1.2104, up from $1.2090 late Wednesday, and the dollar buying ¥109.62.
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