Short-term bonds fall after weak auction
Prices for U.S. debt are mixed after the government sells $39 billion in 5-year notes in lackluster auction.
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NEW YORK (CNNMoney.com) -- Short-term Treasurys prices fell Wednesday after the government's $39 billion auction of 5-year notes received lukewarm demand.
The government said it took in $74.8 billion worth of bids for the $39 billion in 5-year notes offered, which made for a bid-to-cover ratio of 1.9. That compares with 2.58 at June's auction of 5-year notes.
A ratio below 2 is considered a sign of relatively weak demand.
Tuesday's auction came after the government sold $42 billion in 2-year notes and $27 billion in 52-week bills Tuesday. On Monday, the U.S. sold $6 billion in Treasury Inflation Protected Securities and $29.6 billion in 3-month bills.
On Thursday, the Treasury will offer $28 billion in 7-year notes in the last phase of a record $200 billion weekly debt offering.
Many analysts say the record amounts of debt being offered by the government each month could eventually overwhelm demand for Treasurys.
Meanwhile, stocks fell as investors responded to news that Yahoo (YHOO, Fortune 500) was partnering with Microsoft (MSFT, Fortune 500) and digested a weaker-than-expected reading on durable goods orders.
Bond prices: The benchmark 10-year note was up 5/32 to 95-18/32 and yielded 3.67%, down from 3.71% Tuesday. Bond prices and yields move in different directions.
The 30-year bond rallied 16/32 to 95-22/32 and yielded 4.52%.
The 5-year note dipped 6/32 to 99-30/32 and its yield was 2.65%.
The 2-year note fell 13/32 to 99-2/32, and its yield was 1.17%.
The yield on the 3-month note was 0.19%. 
