Treasuries looked like a safer, more valuable bet the day after the Federal Open Market Committee pledged to keep rates exceptionally low through the first half of 2013, which most economists took as an assurance that the Fed would not raise rates at all during that time.

"What we've learned from the Fed and their announcement is they're thinking things are pretty dire," said Scott Graham, head of government bond trading at BMO Capital Markets in Chicago.

"While the Fed action will benefit the stock market, we still have continuing issues in Europe and slower growth in China -- as you look around the world globally there's still plenty to be concerned about," he said.

Stocks, which rose more than 400 points on Tuesday after the FOMC statement, fell more than 2 percent each in the three major indexes.

In contrast, the benchmark 10-year Treasury note was up 22/32 in price after briefly posting a full point gain, its yield falling to 2.16 percent, down from 2.24 percent late on Tuesday.

"Stocks are making new lows on the day," said Todd Colvin, a futures trader at MF Global in Chicago.

He also cited fear circulating in the markets that France would lose its AAA sovereign rating, despite an announcement from Moody's on Wednesday that France's rating outlook was stable, and an assurance by Standard & Poor's earlier this week that no ratings change for France was on the horizon.

The 30-year Treasury bond was up 1-17/32 in price to yield 3.55 percent, down from 3.68 percent at Tuesday's close. The bond was briefly trading a full two points higher in price.

The Treasury Department is set to sell $24 billion in 10-year notes at 1 p.m. (1700 GMT).

Copyright Reuters, 2011