NEW YORK (CNN/Money) - U.S. Treasurys remained flat Tuesday as buying fueled by stock losses and a cautious consumer outlook countered selling after investors purchased fixed-income securities before the long Memorial Day weekend.

Two-year notes remained flat at 100-7/32, yielding 3.24 percent, with five-year notes also staying unchanged at 99-21/32 to yield 4.44 percent.

Benchmark 10-year notes rose 2/32 to 98-1/32, yielding 5.13 percent, down from 5.14 percent at Thursday's close, and 30-year bonds fell 1/32 to 95-29/32 to yield 5.66 percent, unchanged from last week's close.

The Conference Board, a private research group, said its overall index of consumer confidence edged up in May as Americans were upbeat about the economy's recovery and an improving labor market. But the group said consumers remained cautious about the outlook for later in the year.

The closely watched consumer confidence index rose to 109.8 in May from a downwardly revised 108.5 in April, close to analysts' forecasts for a slight rise to 109.0 but still below March's reading of 110.7.

But Americans' view of their present situation was more sanguine than their outlook for the future. The Conference Board's expectations index, a gauge of consumers' six-month outlook, fell for a second straight month to 109.4 in May from 109.6 in April.

Treasurys were under pressure earlier in the session, in part because investors were reversing safety bets placed before the Memorial Day holiday weekend. Participants had been concerned about selling safe-haven government debt before the three-day weekend for fear potential terror threats could cause the market to open unexpectedly firmer Tuesday.

"The safety bid was being unwound," said John Canavan, market analyst at Stone & McCarthy Research Associates. "People were very nervous going into the weekend given the terrorist fears and the Pakistan-India situation. And with no new developments in either of those scenarios, some of the nervous trades from last week are being unwound."

India said Tuesday Pakistan leader Pervez Musharraf had indulged in "belligerent posturing" that had dangerously stoked tensions between the nuclear rivals.

India Foreign minister Jaswant Singh's comments came hours after Pakistan conducted the third and final missile test and Indian and Pakistani forces traded heavy fire across their cease-fire line in Kashmir, at the heart of the tense standoff. In his speech, Musharraf said Pakistan did not want war, but was ready to meet any attack with full force.

"There was relief that nothing happened over the weekend, so there was some selling in the bond market, and now we've just kind of caught a bid because the stocks are down," one Chicago Board of Trade debt futures broker said. "(But) we really have to get a little more on the upside to catch a few stops and make people feel a little better about getting above points of resistance."

Anticipation of a record-size $27 billion auction of two-year notes scheduled for Wednesday weighed on short-term maturities, traders said. Dealers often try to cheapen issues before a government sale to push yields higher and make the new securities more attractive to investors.

"The two-year is underperforming longer maturities because of the supply that's going to come in the auction, so the yield curve is a little flatter," said a trader at a primary government securities dealer.

The Commerce Department's report that personal income rose 0.3 percent in April, as expected, while personal spending rose 0.5 percent, a little below the 0.7 percent forecast, had no discernible impact on the market.

A 7 percent jump in sales of U.S. existing homes in April reported by a national real estate trade association topped economists' expectations, but did not hurt bond prices, analysts said.

In the currency market, the dollar continued its slide against the euro and the yen. The euro bought 92.92 cents, up from 92.12 at Thursday's close. The dollar bought ¥124.48, down from ¥124.70 at last week's close.  

-- from staff and wire reports