NEW YORK (CNNMoney.com) -- The price to buy U.S. debt spiked quickly Thursday afternoon, as investors funneled money into lower-risk securities when the the stock market plunged nearly 1,000 points on fears about the European debt crisis.
What prices are doing: The benchmark 10-year note rose 1-10/32 to 101-31/32, pushing the yield down to 3.39%.
Bond prices and yields move in opposite directions. The 30-year bond rallied 3-19/32 to 107-17/32 with a 4.18% yield. The 2-year note rose to 100-13/32 with a 0.8% yield. The 5-year note gained to 101-20/32, yielding 2.16%
What's moving the market: The Dow's plunge was exacerbated by a steep drop in shares of Dow component Proctor & Gamble, which fell about 37%, possibly due to a technical glitch.
After the Dow dropped nearly 1,000 points Thursday afternoon, it then recovered more than 600 points to close down 347 points. Treasurys too came down slightly from their highs.
Protests in Athens turned violent Thursday after Greece approved a bailout package that contained tough austerity measures, including cuts to public sector salaries and pensions.
Spurred by the Greek bailout package and threats of credit downgrades for Portugal, investors have been wary of Europe's ongoing debt problems all week. Europe's economic unrest has increased investors' appetites for U.S. debt, because it's backed by the U.S. government and considered lower risk that equities.
World markets have been declining on fears that the Greece aid package will fail to prevent that country, and other vulnerable euro-zone states such as Portugal and Spain, from defaulting on their massive debts.
What analysts are saying: "We saw a kind of panic buying spree as investors liquidated stocks and other risk assets," said Kevin Giddis, president of fixed income capital markets at Morgan Keegan, referring to the afternoon spike in Treasury prices.
As for ongoing concerns about Greece, the typical "fundamentals" this week have, so far, taken a back seat to the emotional aspects of the crisis, he said.
"As long as the euro zone remains in the spotlight, it's way too early to declare an end to the accompanying flight-to-quality trade," Giddis wrote in an e-mail to investors Thursday morning.
Tomorrow's national jobs report will put that trend to the test.
Looking ahead: Analysts are expecting Friday's national unemployment report to show employers added 200,000 jobs in April. The report is considered a bellwether measure of the financial recovery and, since the recession, has often been a major market-mover.
But would good news from the jobs report be enough to turn around the European debt-fueled appeal of U.S. bonds?
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.80%||3.88%|
|15 yr fixed||3.20%||3.23%|
|30 yr refi||3.82%||3.93%|
|15 yr refi||3.20%||3.23%|
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