By Deborah Levine, MarketWatch NEW YORK (MarketWatch) -- Treasury prices turned lower on Thursday, pushing yields up to seven-week highs, after the Labor Department said applications for initial jobless benefits in the latest week declined more than economists expected. Ten-year-note yields (UST10Y 3.74, +0.06, +1.60%) rose 3 basis points to 3.78%, the highest on a closing basis since June 19. A basis point is 0.01 percentage point. Yields on 2-year notes (UST2YR 1.20, +0.00, +0.08%) increased 3 basis points to 1.24%, also the highest in seven weeks. Jobless claims fell by 38,000 to 550,000 in the week ended Aug. 1. Analysts surveyed by MarketWatch expected claims to fall to 578,000. The improving trend from the peak in March is "supporting the notion that the worst of the job cuts is over," said T.J. Marta, chief strategist at Marta on the Markets. "This number is now past the seasonality problems associated with the early auto-plant closings this year due to the General Motors and Chrysler bankruptcies." The report also said continuing unemployment claims rose to 6.31 million in the prior week. Still, trading may remain in a range before the Labor Department's monthly employment report on Friday. Economists surveyed by MarketWatch are looking for a median loss of 275,000 jobs for July, which would be the fewest since last August. Later in the session, the Federal Reserve will buy Treasurys maturing between 2016 and 2019, the second of two operations this week that continue its effort to keep borrowing costs, particularly for companies and homebuyers, affordable. The last time the central bank bought from this maturity range, it purchased $7 billion. See more on Fed's Web site. "The program in the U.S. is likely to draw to conclusion in September after the completion of the package of $300 billion, of which $235 billion has already been purchased," said John Spinello, Treasury strategist at primary dealer Jefferies & Co., one of the 18 primary dealers that trade with the Fed.

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