Treasurys Mixed After Economic Reports

NEW YORK — Long-term Treasury prices closed higher Thursday after investors digested a series of uneven economic reports that on balance suggested more interest rate cuts could be in the offing.

The reports, even one that was better than expected, largely cheered bond investors because the readings could make it easier for the Federal Reserve to justify further rate cuts. The central bank on Tuesday lowered its benchmark fed funds rate by 0.75 percentage point to 2.25 percent.

The figures encouraged bond market investors to seek safety in long-term Treasurys, especially ahead of a long weekend. Signs of economic weakness generally create demand for safe assets.

The bond market closed at 2 p.m. Eastern time, an hour earlier than normal, and will be closed for Good Friday.

The benchmark 10-year Treasury note rose 3/32 to 101 12/32 with a yield of 3.34 percent, down from 3.41 percent late Wednesday, according to BGCantor Market Data. Prices and yields move in opposite directions.

The 30-year long bond rose 25/32 to 103 13/32 with a yield of 4.17 percent, down from 4.26 percent.

However, there was some selling of shorter-term notes. The 2-year note fell 7/32 to 100 24/32 with a yield of 1.60 percent, down from 1.63 percent.

There also was very heavy demand Thursday for 3-month Treasury bills, another indication that investors don't believe the soft phase in the economy or the problems in the credit market have reached an end. The yield on the 3-month note fell to 0.35 percent from 0.63 percent Wednesday as the discount rate fell to 0.34 percent from 0.62 percent.

The fresh economic figures indicated weakness in the job market, manufacturing sector as well as in the broader economy.

The Labor Department's report that the number of workers seeking unemployment benefits last week rose to the highest level in nearly two months stirred concern about the health of the consumer.

A gauge of future economic activity fell for the fifth straight month in February, suggesting that the weakening U.S economy could be slipping into recession. The Conference Board said its index of leading economic indicators slid 0.3 percent last month to 135.0 after dipping a revised 0.4 percent in January to 135.4.

Finally, the Philadelphia Fed said regional manufacturing remained weak this month, though it showed improvement from an earlier survey. The report was welcome news for stock market investors looking for any signs that the weak economy could be on the mend.

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