Benchmark 10-year Treasury notes, down 4/32 before the report, were down 5/32 afterward. Their yields stood at 2.93 percent, up from 2.91 on Thursday.

The Commerce Department said durable goods orders increased 1.9 percent after a revised 2.7 percent drop in April, previously reported as a 3.6 percent fall. Economists polled by Reuters had expected orders to rise 1.5 percent last month.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, rebounded to increase 1.6 percent last month after a revised 0.8 percent fall in April.

Copyright Reuters, 2011