NEW YORK (CNN/Money) - U.S. Treasury prices dipped again on Thursday after stronger-than-expected data on U.S. durable goods orders, jobless claims and home sales yanked the rug out from under bond bulls who were betting on weaker numbers.

Treasurys started the U.S. session higher but quickly shed those gains. The benchmark 10-year note fell sharply for a second straight day following news that August durable goods orders declined only 0.6 percent, beating forecasts for a 2.6 percent drop.

Around 3:30 p.m. ET, the benchmark 10-year note lost 15/32 to 104-20/32, while the yield climbed to 3.81 percent from 3.75 percent on Wednesday.

The five-year note lost 8/32 to 101-26/32, taking yields to 2.85 percent from 2.80 percent, while the 30-year bond shed 26/32 to 109-11/32 for a yield of 4.77 percent from 4.72 percent.

At the short end, the new two-year note was quoted at 99-25/32 giving a yield of 2.00 percent. In a sale of $27 billion in new paper on Wednesday the notes went at a yield of 1.96 percent, the lowest ever for an auction.

First-time jobless claims during the week ended Sept. 21 totaled 406,000, well below forecasts of 421,000. Treasurys took it on the chin once more, compliments of the August new homes sales report that showed gains of 1.9 percent to 996,000 homes, much stronger than the forecasted 981,00 home sales.

"The numbers, while not great, were better than expected and I think a lot of bad news was priced into the market," said Bill Hornbarger, fixed income strategist at A.G. Edwards & Sons. "And there are a lot of people out there who are just trying to book some profits."

The data releases were generally bullish news for the economy, but not everything came up roses. July's rise in durable goods orders was revised down slightly to 8.6 percent from 9.2 percent.

Although weekly jobless claims came in below expectations, they remained above the psychologically significant 400,000 that many economists consider a sign of weakness in the labor market. Furthermore, the report from the previous week was revised to 430,000 claims from 424,000.

There also was a sign of weakness in continuing claims, which jumped 89,000 to 3.678 million, and that could see the jobless rate tick higher in September after a surprise drop the month before. There was softness in the August help wanted index which dipped to 41 from 44 the month before and this is seen as a leading indicator of employment growth.

Figures on new home sales were mixed with the August gain tempered by a downward revision for July's gains to just 1.9 percent from an originally reported 6.7 percent.

"You can, I think, look into any one of the reports to find reasons to be pessimistic," said Jim Collins, analyst at Salomon Smith Barney. "They're kind of a mixed bag but I tend to look at them as being a little bit stronger."

Treasurys have staged a near relentless rally the last five weeks, taking yields on the benchmark 10-year note to lows not seen since 1958.

In the currency market, the U.S. dollar got a boost from stronger-than-expected U.S. durable goods and record-high housing sales data on Thursday in thin, choppy trading dampened by investors' fears about possible war with Iraq and global economic uncertainty.

The dollar started firming after a report showed orders for costly manufactured items fell 0.6 percent in August. That was far less than the 2.6 percent decline expected by the market and sparked a glimmer of hope that a slump in business investment may be nearing an end.

Around 3:30 p.m. ET, the euro bought 97.79 U.S. cents, while the greenback purchased ¥121.95.  

-- from staff and wire reports