By Deborah Levine, MarketWatch NEW YORK (MarketWatch) -- Treasury prices extended gains on Thursday, pushing yields on 10-year notes to the lowest in more than two weeks, after the Labor Department reported an unanticipated increase in first-time jobless claims last week. Yields on 10-year notes (UST10Y 3.69, +0.01, +0.22%) fell 5 basis points to 3.65%. They briefly touched 3.62%, the lowest since Feb. 8. Yields move in the opposite direction of prices. A basis point is 0.01%. Yields on 2-year notes (UST2YR 0.86, 0.00, 0.00%) declined 1 basis point to 0.84%. The number of people filing initial claims for state unemployment benefits rose by 22,000 to 496,000. Economists surveyed by MarketWatch had been looking for claims to drop to 460,000 in the week ended Feb. 20. Read more about jobless claims. It's "quite clear that the labor market remains quite stressed with various indicators still suggesting robust employment growth remains elusive," said Dan Greenhaus, chief economic strategist at Miller Tabak. A second government report showed durable-goods orders surging 3% last month, double the forecast of economists surveyed by MarketWatch, on aircraft orders. Excluding the big gain in transportation orders, orders fell 0.6% in January. See more on durable goods. Still to come is the Treasury Department's auction of $32 billion in 7-year notes, the final auction in a week that has brought $126 billion of debt to market. Bids are due at 1 p.m. Eastern time. See recent auction results. Also, traders will listen to speeches from three Federal Reserve officials, including Chairman Ben Bernanke's second day of congressional testimony. His prepared remarks will be identical to Wednesday's, when he reiterated that benchmark interest rates would remain low "for an extended period."

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