By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasurys extended losses on Wednesday, pushing yields to the highest in a week, after the Institute for Supply Management said its non-manufacturing index rose last month more than analysts had anticipated, adding to hopes about the economic rebound and further dulling the appeal of government debt.
Yields on 10-year notes (UST10Y 3.64, +0.04, +0.97%) , which move inversely to prices, rose 4 basis points to 3.65%, the highest since Feb. 24. A basis point is 0.01%.
Yields on 2-year notes (UST2YR 0.81, +0.03, +4.10%) increased 3 basis points to 0.82%.
ISM's services index to 53% in February from 50.5% in January. Readings over 50% indicate more firms said business was getting better than said it was worsening. Economists surveyed by MarketWatch were looking for the index to rise to 51%. See more on ISM services.
Earlier, Treasurys turned modestly lower after ADP said private employers cut 20,000 jobs in February, in line with expectations of some economists. The company's report comes two days before the Labor Department's more closely-followed monthly employment data, which analyst to show much greater job losses due to severe snowstorms that hit last month. See story on ADP data.
"While the 20,000 drop was expected, the market has whisper numbers considerably higher -- more losses -- due to weather," said strategists at CRT Capital Group. "If the market were taking this to heart it would be a bit weaker still. We remain very neutral here."
Economists surveyed by MarketWatch are looking for payrolls to fall by 90,000 in the government's survey released on Friday.
Still to come, traders look towards the release of the Federal Reserve compilation of anecdotes about the economy to be used at the policy meeting on March 16. The so-called Beige Book is due for release at 2 p.m. Eastern time.
The Beige Book "will be read for whether it corroborates the recent generally dovish tone by Fed speakers," said T.J. Marta, chief market strategist at Marta on the Markets.
Earlier, Eric Rosengren, the president of the Boston Federal Reserve Bank, said interest rates at current very low levels are "totally appropriate" given the slow recovery from the very severe recession. Other Fed officials discussed regulation in prepared remarks. See more on Fed's Rosengren.
