Treasurys gain on tepid corporate results
Prices for U.S. debt rise after quarterly results from General Electric and Bank of America throw cold water on Wall Street rally.
NEW YORK (CNNMoney.com) -- Treasurys drifted mostly higher Friday after mixed economic news and lackluster corporate results raised demand for the safety of U.S. debt.
The advance came at the end of a down week for the Treasury market, which was pressured by better-than-expected results from Intel Corp. (INTC, Fortune 500), JPMorgan (JPM, Fortune 500) and Goldman Sachs (GS, Fortune 500).
But the tone turned more cautious on Friday after reports from General Electric and Bank of America sparked a selloff on Wall Street. The Dow Jones industrial average fell more than 1% and slipped below 10,000.
Bank of America (BAC, Fortune 500) reported a larger-than-expected loss for the third quarter. General Electric's (GE, Fortune 500) earnings beat expectations but revenue fell short of forecasts.
Economy: A pair of economic reports highlighted the cloudy outlook for the U.S. economy, which has shown sings of improvement but remains fragile.
The Federal Reserve said industrial production rose 0.7% last month after an upwardly revised increase of 1.2% in August. Economists surveyed by Briefing.com had forecast a 0.2% rise.
The report suggested that economic growth in the third quarter could be stronger than anticipated.
However, the Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for October fell to 69.4 from September's 73.5.
The index, which was expected to come in at 73.3, underlined concerns that weak consumer spending will continue to hamper the economic recovery.
TIC: The government's Treasury International Capital report on foreign capital flows showed that overseas demand for U.S. assets rebounded in August.
Net foreign purchases of long-term U.S. securities, excluding swaps, rose to $28.6 billion in August from $15.3 billion in July, according to the TIC data.
China, the biggest owner of U.S. debt, trimmed its holdings to $797.1 billion in August from $800.5 billion in July. The second largest holder, Japan, increased its portfolio of U.S. assets to $731 billion from $724 billion.
Bond prices. The benchmark 10-year note was up 13/32 to 101 24/32 and its yield fell to 3.42% from 3.46% late Thursday. Bond prices and yields move in opposite directions.
The 2-year note edged down 1/32 to 100 2/32 with a yield of 0.97%.
The 30-year bond gained 1 3/32 to 104 7/32. Its yield was 4.25%.
The yield on the 3-month bill was 0.07%. 
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