NEW YORK (CNNMoney.com) - Treasury prices slid Wednesday after strong manufacturing data suggested that the Fed would continue raising interest rates.

The benchmark 10-year note fell 9/32 to 99-10/32, yielding 4.58 percent, up from 4.55 late Tuesday. The 30-year bond lost 27/32 to 99, yielding 4.56 percent, up from 4.51 in the previous session. Bond prices and yields move in opposite directions.

The five-year note lost 4/32 to yield 4.62 percent, and the two-year note fell one tick to yield 4.70 percent.

The manufacturing data reaffirmed the view that a solid economic rebound followed the fourth quarter's slowdown, giving investors reason to sell government debt.

A rise in the Institute for Supply Management's factory index was the primary catalyst for the market's decline. The index rose to 56.7 in one of the first readings on economic activity in the just-completed month. That's up from a 54.8 reading in January and better than the forecast of 55.5 from economists surveyed by Briefing.com.

The Commerce Department said personal income increased 0.7 percent in January, above economists' forecast for a 0.6 percent gain. Personal spending shot up 0.9 percent, just below analyst expectations. The core personal consumption expenditures index, an inflation measure, increased 0.2 percent, matching forecasts.

Construction spending rose a much weaker-than-expected 0.2 percent in January, the Commerce Department said, in a soft start for the industry in 2006.

Weaker-than-expected business activity data from the Midwest, a slip in consumer confidence and a fall in the sales of existing homes on Tuesday had fanned speculation the Federal Reserve might not have much room to raise interest rates beyond an expected rise to 4.75 percent in March.

"On the U.S. data front we did not get very reassuring numbers. To confirm market expectations in respect of Federal Reserve tightening this year, we need significantly stronger numbers," Michael Klawitter, senior currency strategist at West LB in Duesseldorf, told Reuters.

In currency trading, the dollar gained.

The dollar bought ¥116.09, up from ¥115.75 late Tuesday, while the euro bought $1.1918, down from $1.1922 in the previous session.

-- from staff and wire reports

________________

Click here for updated bond charts.