NEW YORK: US Treasuries prices posted their second straight day of declines on Friday as Wall Street and European stock markets bounced back from a sharp sell-off.
Benchmark 10-year notes, which rose in price by as much as 3 points on Wednesday on fears over the global economy, were off 12/32 on Friday to yield 2.172 percent in early New York trading.
"Some reason has returned to the market," said Sharon Stark, fixed income strategist at D.A. Davidson in St. Petersburg, Florida. "There's a sense things got a little overdone."
A traditional safe-haven for investors, Treasuries rose steeply early this week on heavy buying as fears mounted that the global economy was slowing and America's growth prospects were dimming.
But on Friday, Wall Street's main indices were up nearly 1 percent, and the MSCI index of world stocks was ahead 0.85 percent. Stocks in Europe, where fears of a recession are building, were also up.
"The US economy is affected by Europe, but it isn't to the degree many investors initially thought, especially with regards to net exports," Stark said.
"European exports on average account for about a half percent of GDP." Thirty-year Treasuries were last off 23/32 in price to yield 2.973 percent, compared with a 2.941 percent yield at Thursday's close.
Short maturities were also down in price, with the seven-year note off 9/32 and yielding 1.86 percent.
Declines in Treasuries deepened after the US Commerce Department reported that housing starts and permits rose in September, a signal the market's modest recovery is supporting what appears to be growing strength in the broader economy.
Groundbreaking rose 6.3 percent to an annual 1.02 million-unit pace.
Economists polled by Reuters had forecast a slightly smaller gain.
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