Bonds gain, dollar moves higher

NEW YORK (CNNMoney.com) -- Bond prices rose Friday, a day after surging in the face of an equities market spooked by debt concerns, while the dollar gained against the euro and yen.

The 10-year note increased 9/32, or $2.81 on a $1,000 note, to yield 4.76 percent, down from 4.79 on Friday. The 30-year climbed 16/32 to yield 4.93 percent, down from 4.97. Bond prices and yields move in opposite directions.

The five-year rose 5/32 to yield 4.57 percent, and the two-year gained 4/32 to yield 4.51 percent.

The federal government said the nation's economic growth picked up in the second quarter, at an annual rate of 3.4 percent.

That's up from a revised 0.6 percent growth rate in the final reading of first-quarter growth.

The bond market showed little reaction to a slightly softer-than-expected reading on consumer sentiment from the Reuters/University of Michigan Surveys of Consumers. The survey said the index came in at 90.4, slightly below forecasts of 91.2 , but above June's final reading of 85.3.

"It's all stocks," Adam Brown, co-head of U.S. Treasury trading at Barclays Capital in New York, told Reuters.

High-yielding currencies fell sharply and the dollar gained in volatile markets on Friday as an overnight sell-off in credit and stock markets led investors to pare risky carry trades.

The euro bought $1.3629, down sharply from $1.374 at the end of Thursday's session. The dollar bought ¥118.51, up from ¥118.13.

"Markets are very nervous on all fronts - equities, bonds and currencies... It is Friday and it's the end of the month, so we can have a very nervous market ahead of the weekend," Niels Christensen, FX strategist at Nordea, told Reuters.

"[But] it's a two-way business. Some might be closing down their carry trades, while others see this as an opportunity to go in at very attractive levels. That's the reason why the yen is a bit weaker," he told the news agency.

--from staff and wire reports.