Treasury prices fall
Prices for US debt retreat as rising stock prices draw investors away from safe-haven assets.
NEW YORK (CNNMoney.com) -- Treasurys fell Tuesday, giving back earlier gains, as investors chased higher returns in the stock market.
The retreat comes after concerns about the health of the banking sector and dour corporate results had boosted demand for the safety of U.S. debt earlier in the session. But the sentiment changed later in the day after Treasury Secretary Tim Geithner defended the government's handling of the controversial $700 billion bailout program.
Geithner's remarks helped spark a bank-lead rally on Wall Street, with the major stock indexes resuming a six-week rally that had fizzled in the previous session. Wall Street ended the day higher, with the Dow Jones industrial average adding 1.6%.
Meanwhile, the Federal Reserve bought another $7 billion worth of Treasurys as part of its plan to buy $300 billion in government debt. The central bank purchased securities that mature between February 2016 and February 2019. The Fed also plans to buy Treasurys on Thursday.
By purchasing Treasurys, the Fed hopes to lower interest rates on certain business and consumer loans, such as mortgages, to help get the troubled economy back on track.
As the Fed keeps up its buying, the Treasury Department is set to auction another $8 billion in Treasury Inflation-Protected Securities, or TIPS, Thursday.
Bond prices: The benchmark 10-year note was down 17/32 to 98 24/32, and its yield rose to 2.9% from 2.84% late Monday. Bond prices and yields move in opposite directions.
The 30-year bond lost 30/32 to trade at 95 22/32, and its yield rose to 3.74% from 3.67%.
The 2-year note slid 2/32 to trade at 99 28/32 and its yield rose to 0.95% from 0.92%.
The yield on the 3-month note rose to 0.15% from 0.13%.
Meanwhile, lending rates were mixed. The 3-month Libor was unchanged from Monday at 1.10%, according to Bloomberg.com. The overnight Libor rate decreased to 0.2% Tuesday from 0.22% Monday.