Treasurys edge higher
Government figures show initial claims for unemployment benefits rose last week. And more debt supply is headed to market.
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| Click the chart for current bond prices and yields. |
NEW YORK (CNNMoney.com) -- Treasurys edged higher Thursday after new reports hinted at continued economic weakness and investors focused on the volume of new issuance headed to market.
The Labor Department said initial claims for unemployment benefits rose 27,000 last week to 640,000. The number of people filing ongoing jobless claims rose to a record-high.
Another report showed weakness in the housing sector. The National Association of Realtors said existing home sales fell last month to a seasonally adjusted annual rate of 4.57 million units, down 3% from 4.71 million in February. The rate was down 7.1% year over year.
Bondholders are also focused on the Federal Reserve's ongoing campaign to purchase $300 billion in Treasurys. By buying back government debt, the Fed hopes to drive down interest rates on consumer and business loans, such as mortgages, to help revive the economy.
The central bank on Thursday bought $7 billion worth of U.S. debt maturing between May 2012 and August 2013. The central bank had almost $16 billion worth of bids submitted. The purchase follows a $7 billion operation Tuesday.
Even as the government has been buying back debt, it continues to issue it. On Thursday, the Treasury Department auctioned another $8 billion worth of inflation-protected securities.
Next week, the Treasury plans to sell $40 billion worth of 2-year notes, $35 billion worth of 5-year notes, and $26 billion worth of 7-year notes.
Wall Street struggled Thursday, but in a late session comeback, stocks managed to post gains, with the Dow Jones industrial average ending the day 70 points higher. Investors have been paying close attention to a slew of corporate earnings this week.
After the closing bell, American Express (AXP, Fortune 500) reported that earnings fell 56%. And software giant Microsoft (MSFT, Fortune 500) reported that its profit fell 32%.
Bond prices: The benchmark 10-year note rose 6/32 to 98-18/32, and its yield dipped to 2.92% from 2.95% late Wednesday. Bond prices and yields move in opposite directions.
The 30-year bond added 8/32 to trade at 94-26/32, and its yield edged lower to 3.79% from 3.81%.
The 2-year note added 2/32 to 99-29/32, and its yield dipped to 0.94% from 0.97%.
The yield on the 3-month note fell to 0.10% from 0.14%.
Meanwhile, lending rates were mixed. The 3-month Libor dipped to 1.09% from 1.10% Wednesday, according to Bloomberg.com. The overnight Libor rate eased to 0.2% from to 0.21%.
Libor, the London Interbank Offered Rate, is a daily average of rates that 16 different banks charge each other to lend money in London. 
