Greece bailout fears boost Treasurys

NEW YORK (CNNMoney.com) -- U.S. bonds rallied Tuesday, as fears about Greece's ability to refinance its debt again plagued investors.

What prices are doing: The benchmark 10-year note rose 23/32 to 100-6/32, pushing the yield down to 3.61%. Bond prices and yields move in opposite directions.

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Click the chart for current prices and yields.

The 30-year bond rallied 1-24/32 to 103-10/32 with a 4.43% yield. The 2-year note rose to 100-3/32 with a 0.96% yield. The 5-year note gained 12/32 to 100-18/32, yielding 2.39%.

What's moving the market: At a meeting in Berlin Tuesday, a coalition of three German political parties called for legislation that, in the future, would allow for the "orderly" default of euro-zone countries with massive deficits.

Over the weekend, Greece accepted a $146 billion bailout package containing tough austerity measures that have since ignited strikes by civil servants in the struggling country.

Investors are worried the bailout may not be fully approved by other eurozone countries in time for Greece to meet its May 19 deadline for refinancing 8.5 billion euros (about $11.1 billion) in debt.

Another concern on investors' minds is -- are Portugal, Spain and some of Europe's other debt-strapped countries next?

Stocks slumped Tuesday, as concerns about European debt curbed appetites for risk.

Investors often view U.S. debt as a more attractive investment in light of economic instability in other countries, and this week, Europe is not the only region with problems that has increased the safe-haven appeal of Treasurys.

China is also part of the brew. The country's central bank, over a long holiday weekend, said it would raise banks' reserve requirements to rein in inflation.

What analysts are saying: "It's the same old story," said Kim Rupert, a fixed income analyst with Action Economics. Tuesday's upward movement for Treasurys exemplifies yet another "flight-to-quality" bid, seen many times over the last few months as Greece's debt crisis has aroused concerns from investors and driven them to purchase lower-risk U.S. bonds, she said.

"The bailout package over the weekend wasn't really a panacea, it just creates more problems than it solves," Rupert said. "It makes for a pretty sour tone for equities, and that's positive for Treasurys."