Treasury yields continue to slide

NEW YORK (CNNMoney) -- Treasuries rallied a bit, sending yields further lower, as investors continued to fret about political unrest in Libya and rising oil and gas prices.

While the Treasury market wasn't moving much on Friday, this week has seen some big moves. "On the week we are down a lot in yields," said Mary Ann Hurley, vice president of fixed income at D.A. Davidson in Seattle. "We are not reversing out the price gains, lower yields, and I think that is very important."

One week ago, the yield on the 30-year bond ended the session at 4.70%. Friday, the yield dipped to 4.50%. The benchmark 10-year yield ended the session at 3.59% last week and Friday it was hovering around 3.42%. The 5-year note yield was 2.17% and the 2-year yield was 0.73%.

Citizens in Libya are protesting dictator Moammar Gadhafi's 42-year reign and the country's high unemployment. Political unrest increases investors' interest in buying Treasuries because Uncle Sam's debt is considered one of the safest places to park cash in times of uncertainty.

Also, Libya is Africa's third largest oil producer. Because the nation is on top of the continent's largest reserves of oil, the protests have pushed crude as high as $103 a barrel this week. Oil prices had eased slightly Friday, but the surge in the price of crude has translated into higher gas prices for Americans at the pump.

"If people are going to be spending more of their disposable income on oil, that means there is going to be less for them to spend on other things, which is negative for economic growth," said Hurley.

In times of economic growth, investors move their funds into stocks and more profitable investments. Meanwhile, during a slow economy investors move into bonds.

For months, the yield on the benchmark 10-year note had been pushing toward 4% on signs the economy was headed for a recovery. But Hurley sees the recent pull back in yields continuing. Not only is the recovery going to be slow, but "now with this rising crude prices, that is going to limit growth even further," she said

And the recovery might be slower than investors had hoped. Friday, the U.S. Bureau of Economic Analysis reported the real gross domestic product increased at an annual rate of 2.8% in the fourth quarter in a revision from a preliminary report. The GDP revision was much less than 3.3% increase economists forecasted.

While the report was a negative for the economy, it is also considered old news for the market. "It is revisions to the fourth quarter. We are already almost two-thirds through the first quarter," said Hurley.