NEW YORK (CNNMoney) -- Concerns about the extent of the eurozone debt crisis were punctuated as Moody's Investors Services cut Ireland's credit rating to junk late in the session. That held the yield on the 10-year Treasury bond below 3% Tuesday.
Monday, the benchmark 10-year yield slipped below 3% for the first time since June 27. Tuesday, the yield on the benchmark note ended the session at 2.88%.
Greece, Portugal and Ireland had been the focus of the European debt crisis. But now investors are worried that Italy, one of Europe's largest economies, is also bearing a heavy debt burden.
"The 'All Greece All the Time' markets broadened their horizons to 'All Europe All the Time' on Monday, a geographical expansion to be sure," said Guy LeBas, the chief fixed income strategist at Janney Capital Markets, in a research note released Tuesday. "But it's not exactly what we might call a philosophical improvement."
Treasuries are considered "safer" havens in times of uncertainty since they are backed by the U.S. government.
Prices gyrated slightly on either side of break even most of the session Tuesday, but ended the session higher as Moody's downgrade of Ireland's credit rating to junk served up a fresh dose of jitters over European debt troubles. Stocks ended lower for the day.
At the end of the session, the yield on the 30-year bond was at 4.17%. The yield on the two year note was 0.36% and the 5-year note yield was 1.44%. Bond prices and yields move in opposite directions.
The lion's share of investor focus Tuesday was on the European debt crisis, but Kim Rupert, fixed income analyst at Action Economics, said investors are also keeping one eye on "concerns that the current economic slowdown might be a longer stall," both at home and abroad.
Investors had their pick of reasons to be nervous on this side of the pond.
At the end of last week, investors got a much weaker-than-expected unemployment report from the government. Democrats and Republicans are squaring off in Washington over the debt ceiling, and this week starts the corporate earnings season.
As investors fret over the recent signs of weakness in the U.S. economy, they got a glimpse into what the Federal Reserve policymakers are thinking.
The minutes from the Federal Reserve's most recent Federal Open Market Committee meeting in June were released Tuesday afternoon.
The minutes said that "a few members" thought "the Committee might have to consider providing additional monetary policy stimulus," but bond prices and yields didn't move much.
Rupert said the notes also indicated quite a bit of disagreement among Committee members. "There wasn't anything clear in the minutes or definitive that suggests that they have QE3 in mind at this point."
"QE3" is short hand for what would be the third round of quantitative easing, or stimulus.
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