Treasurys advance in thin trading

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NEW YORK (CNNMoney.com) -- Treasurys recovered from earlier losses Monday as investors succumbed to ongoing economic concerns despite a rally in the stock market.

Trading volume was low, with many market participants out for the Jewish holiday of Yom Kippur, which can exaggerate swings in the market.

"We're still seeing good support for Treasurys even as stocks strengthen," said Kim Rupert, fixed-income strategist at Action Economics. "There's an underlying fear that things are not well with the economy."

Prices briefly fell earlier in the session as investors responded to debt sales by a number of companies such as American Airlines (AMR, Fortune 500), Kroger (KR, Fortune 500) and Viacom (VIA).

Treasurys rose last week, with the yield on the benchmark 10-year note falling 15 basis points, as weaker-than-expected reports on durable goods and new home sales raised questions about the strength of the economic recovery.

Economic agenda. Looking ahead, investors are preparing for a big week of economic reports, starting Tuesday with reports on consumer confidence and home prices.

On Wednesday, the government gives its final reading on the U.S. gross domestic product, which analysts expect will show an annual rate decline of 1.2%. That would be a sharper drop than the first two readings of a 1% decline.

The market is also bracing for the government's closely watched monthly jobs report due Friday. Analysts surveyed by Briefing.com expect the September unemployment rate will have jumped to 9.8% from 9.7%.

Among the other key indicators on tap are readings on personal income and the ISM manufacturing index.

Fed speakers on tap. Meanwhile, investors are also awaiting speeches Tuesday from both Richard Fisher, president of the Dallas Fed, and Charles Plosser, president of the Philadelphia Fed.

Last week, comments from Fed Governor Kevin Warsh added to sentiment that the central bank could aggressively raise interest rates if economic conditions continue to improve.

"There's been a lot of banter about the course of short-term interest rates," said Bill Larkin, portfolio manager at Cabot Money Management. "If there's a robust recovery, the anticipation is that the Fed will become less accommodative."

However, the central bank said in its most recent policy statement that interest rates, which now stand at historic lows near 0%, will remain exceptionally low for some time.

Bond prices: The benchmark 10-year note was up 10/32 to 102 27/32 and its yield fell to 3.28% from 3.4% late Friday. Bond prices an yields move in opposite directions.

The 2-year note was up 1/32 at 100-1/32 with a yield of 0.97%.

The 30-year bond was up 1-1/32 to 108-1/32. Its yield was 4.03%.