Bond yields fall

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NEW YORK (CNNMoney.com) -- Treasury prices rose Monday as investors brace for several key economic reports due out later in the week.

While the economy has shown some signs of stabilization, analysts say the outlook has become cloudy in recent weeks and the optimistic tone that boosted Wall Street earlier this year has been tempered.

"The economy appears to have lost some forward momentum, but the trajectory of growth is up and not down," said MF Global analysts in a research one. "This week's numbers will solidify the outlook."

Reports on housing, manufacturing and the labor market are set to be released later this week, including the Labor Department's closely watched monthly jobs report on Thursday.

Employers are expected to have cut 370,000 jobs from their payrolls after cutting a much smaller-than-expected 345,000 in the previous month. The unemployment rate is expected to rise to 9.6% from 9.4%, according to economists surveyed by Briefing.com.

U.S. Treasurys are considered one of the safest investments available, and demand for government bonds often rises when economic conditions are unstable.

Bond prices rose Friday, with the yield on the benchmark 10-year note falling to its lowest in nearly four weeks, as stocks slumped and concerns about inflation eased.

Wall Street rallied Monday, with the Dow Jones industrial average adding about 1%, at the start of a holiday-shortened week and in one of the last sessions of the second quarter. Portfolio managers often look to spruce up their portfolios at the end of a quarter.

Bond prices: The benchmark 10-year note rose 16/32 to 97-2/32, and its yield fell to 3.48% from 3.51% late Friday.

The 30-year bond was up 27/32 to 99-12/32 and yielded 4.29%.

The 2-year note gained 1/32 to 100-2/32 and its yield was 1.11%

The 3-month bill edged down to 0.18%.

Lending rates: Bank-to-bank lending rates continued to hover around record lows, an indication of some relief for once-frozen pipelines of credit.

The three-month Libor held steady Monday at a record low of 0.60%, according to Bloomberg.com. The overnight Libor rate eased to 0.26% from 0.27%.

The London Interbank Offered Rate -- or Libor -- is a daily average of rates that 16 different banks charge each other to lend money. The closely watched benchmark is used to calculate adjustable-rate mortgages. More than $350 trillion in assets are tied to Libor.