Treasurys gain on bank woes

NEW YORK (CNNMoney.com) -- Bond prices gained as mortgage related worries sent bank stocks lower and weak homebuilder confidence and recession talk rattled stocks Monday.

The benchmark 10-year Treasury note rose 28/32 to yield 4.06 percent and the 30-year climbed 1 7/32 to yield 4.46 percent. Bond prices and yields move in opposite directions.

The five-year note gained 20/32, yielding 3.55 percent, while the two-year note rose 11/32 to yield 3.15 percent.

Bank stocks saw heavy selling after Goldman Sachs placed Citigroup (Charts, Fortune 500) on its "sell" list Monday, saying the bank may have to write off $15 billion more in bad assets backed by poor-quality mortgages.

The National Association for Business Economists said that the risk of recession has increased. The group says gross domestic product will rise at an annual rate of just 1.5 percent in the fourth-quarter, down from 3.9 percent in the previous quarter. A country is not in recession until it has two consecutive quarters of economic shrinkage.

Home builders' confidence remained at record low levels, according to a reading released Monday. A slight uptick in buyer traffic was balanced out by a more pessimistic view six months down the road.

In currency trading, the dollar climbed against the euro and the yen.

The euro bought $1.4657 Monday, down from $1.466 late Friday in New York. The dollar fell to 110.19 Japanese yen, from 110.82.

-- from staff and wire reports