Treasurys gain on flight to safety

NEW YORK (CNNMoney.com) -- Treasurys rose Thursday as investors flocked to the safety of U.S. debt following a dour report on the job market and worries about Greece's fiscal problems.

What prices are doing: The benchmark 10-year note was up 14/32 to 99-28/32, pushing the yield down to 3.63% from 3.69% late Wednesday. Bond prices and yields move in opposite directions.

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Click the chart for current bond prices and yields.

The 30-year bond rose 29/32 to trade at 100-23/32 and its yield was 4.58%. The 2-year note ticked up 2/32 to 100-2/32 and yielded 0.83%.

What's moving the market: The Labor Department released its weekly jobless claims report before the opening bell on Thursday.

Initial jobless claims surged to 496,000 in the week ended Feb. 20. That's much more than the 460,000 claims projected by a consensus of economist opinion from Briefing.com. It's also much larger than the revised tally of 474,000 claims reported for the prior week.

The jobs data largely overshadowed a more upbeat report on orders for durable goods, which rose 3% in January -- much more than expected. The orders were expected to have risen 1.5%, according to Briefing.com consensus.

Treasurys were also supported by ongoing worries that Greece will not be able to repay all of its debts. While most analysts say a default is not likely, there are still concerns that Athens' fiscal woes could be a harbinger of more economic pain across Europe.

Traders are also focused on Capitol Hill, where Federal Reserve chief Ben Bernanke is testifying on monetary policy for a second day.

On Wednesday, Bernanke repeated that the federal funds rate, which is the central bank's primary tool for monetary policy, is likely to stay low for an extended period. That comment helped spark a rally on Wall Street and sent Treasury yields sharply lower.

Bernanke also told members of the House Financial Services Committee that government action has helped start an economic recovery, but warned that many concerns persist -- namely, the state of the job market.

Treasurys were also getting a boost from the uncertainty surrounding the future of the U.S. health care system. President Obama and Republican and Democratic leaders engaged in a spirited but civil debate at a health care summit Thursday, finding agreement on some issues such as high costs but not much common ground on how to achieve reform.

Meanwhile, the government concluded a record $126 billion sale of U.S. debt with a well-received auction of 7-year notes.

Investors submitted bids totaling $95.4 billion for the $32 billion worth of 7-year notes offered Thursday. That made for a bid-to-cover ratio, a measure of demand, of 2.98. That compares with 2.85 at the last 7-year auction in January.

Indirect bidders, a category that includes foreign central banks, bought just over half of the notes sold.

On Wednesday, the U.S. sold $42 billion in 5-year notes. It sold $44 billion in 2-year notes Tuesday and $8 billion in 30-year Treasury Inflation Protected Securities, or TIPS, on Monday.

What analysts are saying: "People were nervous about the auction," said Bill Larkin, a fixed-income portfolio manager at Cabot Money Management. "Now I think they're surprised that it got taken down so well by the market."

Larkin said the jobs data, concerns about Greece and uncertainty about health care reform were all "tailwinds" for Treasurys.

"There's so much news today," he said. "I think people are bit shell shocked, so they're sitting on sidelines."