NEW YORK: US Treasury debt prices rose on Tuesday, with 30-year yields touching record lows after economic data signaled falling crude oil prices and sputtering world growth may be dragging on U.S. businesses.
As U.S. stock prices fell sharply, 30-year bonds were last up 1-7/32 in price to yield 2.3356 percent. Earlier the yield hit a record low of 2.328 percent.
A gauge of U.S. business investment plans unexpectedly fell. The Commerce Department said non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.6 percent last month after a downwardly revised 0.6 percent drop in November.
Economists polled by Reuters had forecast core capital goods orders increasing 0.5 percent in December after a previously reported 0.5 percent drop in November.
"The idea that lower oil costs are nothing but a tax rebate or a decline in tax on consumption is running into the first wave of hard economic data indicating business investment is getting hurt a little bit worse than people originally anticipated," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.
Wall Street prices fell more than 1 percent, partly because of the capital goods data and also due to corporate earnings that fell short of expectations.
Yields on benchmark 10-year notes also moved down and last stood at 1.7650 percent, reflecting a price gain of 18/32, according to Thomson Reuters data. Shorter maturities also rose in price.
The yield curve between five-year notes and 30-year bonds widened slightly to 106.40 ahead of the scheduled start on Tuesday of a two-day Federal Reserve policy meeting.
Vogel said traders expect few changes in policy or outlook on Wednesday, when the Federal Reserve Open Market Committee will issue a statement.
Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin, said he expects the Fed policymakers eyeing interest rate hikes to take the durable goods data up for discussion.
"The Fed will likely look at this and take pause, realizing it can afford to be more patient than many people expected in raising rates," he said.
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