Treasurys climb on weak economic data

By Hibah Yousuf, staff reporter

NEW YORK ( -- Treasury prices advanced Thursday as weak economic data spurred demand for the safety of U.S. government debt.

What prices are doing: The benchmark 10-year note rose 17/32 to 102-17/32, and its yield fell to 3.20% from 3.29% the previous day. Bond prices and yields move in opposite directions.

Click the chart for current prices and yields.

The 30-year bond climbed more than 27/32 to 104-4/32, yielding 4.13%. The 5-year note rose 8/32 to 100-20/32 and yielded 1.99%, while the 2-year inched up 1/32 to 100-3/32, yielding 0.70%.

What's moving the market: Demand for the safety of Treasurys was higher on weak jobs data and business activity.

A report from the Labor Department showed that jobless claims climbed more than expected last week.

Meanwhile, the Philadelphia Federal Reserve Index, a measure of manufacturing growth, snapped a 4-month streak of increases and fell to 8 in June from 21.4 the previous month. That was the lowest reading in 10 months. Economists were expecting the figure to fall to 20.

Treasurys also got a boost following a report that showed the Consumer Price Index, a key measure of inflation, fell by 0.2% in May from the previous month. Economists expected a 0.1% drop.

The low risk of inflation continues to support the Federal Reserve's decision to keep its key interest rate between 0% and 0.25%. The central bank has held the rate near historic lows since since December 2008.

What analysts are saying: "We've gotten two disappointing pieces of economic data, which has led to some weakness in the stock market and renewed the bid for Treasurys," said Kim Rupert, fixed income analyst at Action Economics.

The Philadelphia index "was much worse than anyone anticipated, and that combined with a big jump in jobless claims has increased investor anxiety," Rupert said.

Although Treasury yields will likely rebound from the current low levels, they won't jump considerably, she said, as investors continue to worry about the health of the economy and anticipate a moderate recovery.  To top of page

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