NEW YORK (CNNMoney.com) -- Prices for U.S. Treasurys fell Thursday after a better-than-expected report on initial jobless claims boosted optimism about the economy.
What prices are doing: The benchmark 10-year note was down 14/32 to 103-29/32 and its yield rose to 3.04% from 2.98% late Wednesday. Bond prices and yields move in opposite directions.
The 5-year note fell 5/32 to 100-9/32 with a yield of 1.82%, while the 2-year note was unchanged at 100, yielding 0.63%.
The 30-year bond slid 1 to 106-7/32 and yielded 4.01%.
What's moving the market: The Labor Department said there were 454,000 initial claims for unemployment benefits filed in the week ended July 3, down 21,000 from an upwardly revised 475,000 in the previous week.
Economists had expected 460,000 claims, according to consensus estimates gathered by Briefing.com.
The report eased some concerns about the U.S. economy, which has recovered from a deep slump but remains vulnerable.
In addition, the euro continued to rebound against the dollar, suggesting that investors are becoming a bit more confident in the European economy.
Concerns about the U.S. economic outlook and the debt crisis in Europe have supported Treasury prices in recent weeks as demand for the perceived safety of U.S. debt increased.
But stock and commodities prices have rallied this week in relatively light trading, suggesting that investors have regained some appetite for risk.
Meanwhile, the U.S. announced plans to offer $69 billion worth of bonds and notes next week, including $35 billion in 3-year notes, $21 billion in 10-year notes and $13 billion in 30-year bonds.
What analysts are saying: Despite this week's more optimistic tone, the U.S. economy still faces significant challenges, according to Kevin Giddis, managing director of fixed-income at Morgan Keegan.
Giddis notes that Thursday's report on initial claims does not include unemployed workers who are receiving extended benefits or those who have fallen off the rolls entirely. In addition, he said much of the recent improvement in economic activity has been due to temporary government support.
"Up and down days will prevail," Giddis wrote in a note to clients. "But when you look at the longer-term trends of housing, unemployment and federal aid dependency, the U.S. economy may be sick longer than we think."
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.12%||4.18%|
|15 yr fixed||3.25%||3.21%|
|30 yr refi||4.18%||4.17%|
|15 yr refi||3.30%||3.21%|
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