NEW YORK (CNN/Money) - Bond prices ended their three-week ascent Wednesday as bearish traders took advantage of a government auction of two-year notes to shed debt holdings.

The dollar finished mixed against the euro and the yen.

The benchmark 10-year Treasury note fell 14/32 to 100-9/32 to yield 4.09 percent, up from 4.04 late Tuesday. The 30-year bond dipped 38/32 of a point to 114-12/32, to yield 4.43 percent, up from 4.36 the previous session. Bond prices and yields move in opposite directions.

Prices for the five-year note fell 5/32 of a point to 100-8/32, yielding 3.82 percent, and the two-year note remanined almost unchanged at 100 1/32, yielding 3.61 percent.

After an initial jump during the morning session, Treasury prices slid on strong demand of $22 billion. Traders who had been anticipating a drop in bond prices seized the opportunity to trim their holdings.

"The bond market is collapsing," Andrew Brenner, head of fixed-income at Investec U.S. told Reuters. "What goes up must come down."

The downturn followed Tuesday's release of the minutes of the Federal Reserve's May 3 meeting, which hinted that the central bank would not need to increase the pace of its rate-tightening campaign to tame inflation.

Bond traders hate inflation because it erodes the value of the fixed-income investment.

Debt prices advanced early Wednesday following a report on new orders for long-lasting U.S.-made goods, which jumped by a larger-than-expected 1.9 percent in April, the Commerce Department said. Analysts polled by Briefing.com had expected a 1.3 percent rise.

The bounce was attributed to transportation orders; when the volatile transportation category was excluded, orders for durable goods dipped an unexpected 0.2 percent.

The Commerce Department also said durable orders excluding transportation have declined in two of the last three months, and those orders were at their lowest dollar amount since December.

The slide in bond prices also came as a surprise, as the Census Bureau reported Wednesday that new home sales in April rose to a record annual pace of 1.32 million homes. Economists surveyed by Briefing.com had forecast a 1.33 million sales pace.

"Considering everything, I think the picture is a little bit brighter for the second quarter and some of our fears on the economy in context of this soft patch scare are at least slightly alleviated," Ken Mayland, president of Clearview Economics LLC in Pepper Pike, Ohio, told Reuters.

Other important economic reports slated for release this week include Thursday's gross domestic product and corporate profits report for the first quarter and April's personal consumption and income figures, due out Friday.

In currency trading, the dollar eased against the yen and euro. The dollar bought ¥107.72, up from ¥107.54 late Tuesday, while the euro bought $1.2602, up from $1.2584 in the previous session.

The yen weakened following Japan's April trade report. The release showed that exports are dropping and sparked fears that it would be difficult to sustain the country's strong first-quarter economic growth.

Moreover, the dollar continued to edge higher against the euro as investors capitalize on rising rates in the United States and slow growth in Europe.

Click here for bond charts.

-- From staff and wire reports