Treasury yields dip on Europe jitters

NEW YORK (CNNMoney) -- Treasury yields fell slightly Monday, as worries about Europe's fiscal crisis flared up again and increased the appeal of safe-haven U.S. debt.

Investors are closely watching news out of Europe as Germany, France and other euro zone countries pressure Portugal to take a bailout to ease its massive debt crisis.

Stocks fell on the news, and bond yields seemed to be moving in lockstep with equities on Monday, said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

Treasuries are often considered a lower risk alternative to stocks because they're backed by the U.S. government. When stocks fall, bond prices often rise, and their yields -- which move in the opposite direction -- fall.

Over the long term, Naehu said he expects to see bond yields continue on an upward trend, but as traders weigh jitters about Portugal and economic reports due later this week, there could be some volatility.

Reports on producer prices and consumer inflation are expected, as is the latest U.S. trade data.

Investors will also be closely watching government bond auctions in Portugal, Spain and Italy this week for further signs of how Europe will fare in its debt crisis.

"Over the short-term, it's likely that a significant problem in the euro zone will spur a flight to quality trade in the Treasury market," Naehu said. "You're only seeing hints of that right now."

The yield on the benchmark 10-year note fell to 3.29% from 3.33% on Friday.

The yield on the 30-year bond dipped to 4.46%, while the 2-year note fell to 0.57%, and the 5-year note slipped to 1.92%.