Treasurys trade in tight range

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NEW YORK (CNNMoney.com) -- Treasury prices held steady Thursday as investors weighed newfound optimism about the U.S. economy with a massive amount of supply headed to market.

The yield on the benchmark 10-year note hovered at 3.12% in late trade Thursday, matching the high for 2009 set Wednesday. The yield on the 10-year Treasury yield edged as high as 3.16% earlier in the session.

Bond prices and yields move in opposite directions. A high yield means that the price has fallen, indicating demand for the safe haven investment is waning.

A government report on Wednesday showed a wider-than-expected 6.1% drop in overall first-quarter economic activity. It also indicated that business inventories fell sharply while consumer spending rebounded, raising hopes that the worst of the decline is over and that firms will need to ramp up imports.

Meanwhile, the Federal Reserve bought another $3.025 billion of Treasurys Thursday as part of its plan to purchase $300 billion in government debt in an attempt to drive down interest rates. So far, the central bank has bought back almost $77 billion.

Still, the market remains concerned about the record amounts of supply coming as the government seeks to fund its economic stimulus and financial rescue plans.

Next week, the Treasury will offer $71 billion worth of 3-,10- and 30-year debt securities. The refunding comes after the government sold $101 billion in three separate auctions this week.

Bond prices: The benchmark 10-year note dipped 2/32 to 96 29/32, and its yield rose to 3.12%, even with late Wednesday.

The 30-year bond dipped 2/32 to trade at 90 25/32, and its yield rose to 4.04% from 4.03%.

The 2-year was up 3/32 at 99 29/30, and its yield ticked down to 0.92%.

The yield on the 3-month rose to 0.14% from 0.11%.

Meanwhile, lending rates were mixed. The 3-month Libor fell to 1.02% from 1.03% Tuesday, according to Bloomberg.com. The overnight Libor was unchanged at 0.23%.

Libor, the London Interbank Offered Rate, is a daily average of rates that 16 different banks charge each other to lend money in London.