NEW YORK (CNN/Money) -
Treasury bond prices tumbled Thursday, punctured by the one-two punch of sharply lower weekly jobless claims and a stronger mid-Atlantic factory output.
The dollar edged higher on news that the current account gap widened less than economists had expected.
The benchmark 10-year note lost 28/32 to 100-16/32 to yield 4.19 percent, up from 4.07 percent late Wednesday. The 30-year bond sank 1-23/32 to 108-4/32 to yield 4.82 percent, up from 4.71 on the session. Bond prices and yields move in opposite directions.
The two-year note lost 3/32 of a point at 99-24/32 to yield 2.98 percent, while the five-year note fell 14/32 of a point to 99-21/32 to yield 3.57 percent.
In currency trading, the euro bought $1.3244, down from $1.3397 late Wednesday, while the dollar bought ¥104.76, up from ¥104.24 late Wednesday.
The Philadelphia Federal Reserve's factory survey jumped to 29.6 in December, the highest since July, from 20.7.
The median forecast had been 20.5 but "whisper numbers" rose after Wednesday's New York Fed factory survey, which produced a similar above-consensus result.
Treasury prices also fell prey to profit-taking following a rally Wednesday that pushed yields to six-week lows.
"There are some profit-taking pressures coming into the market," David Ging, fixed income strategist at Credit Suisse First Boston, told Reuters.
Earlier during the session, weekly jobless claims dropped unexpectedly to 317,000, the lowest since July.
The report suggested that payroll employment is growing at a solid clip, a vital ingredient in the Federal Reserve's diet of measured interest rate increases.
"These data are broadly consistent with payroll employment gains in the 200,000 to 250,000 (monthly) range," Steven Wood, economist at Insight Economics, told Reuters.
Oil ended little changed at $44.18 a barrel, a two-week high. The theory that high oil and gas prices could lead to higher inflation will be tested Friday with the November consumer price index report.
The CPI is forecast to rise by 0.2 percent in November after adding 0.6 percent in October. Core prices, stripped of energy and food, are also seen up 0.2 percent.
Also on Thursday, U.S. housing starts for November came in much lower than expected at 1.771 million units annualized, the lowest since May 2003.
The figure was brushed aside as possibly a weather-related blip by dealers who noted that new home sales remain strong.
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