By Susanne Walker and Matthew Brown Oct. 16 (Bloomberg) -- Treasuries were little changed, headed for a second weekly decline, as investors bet a Federal Reserve report today on industrial production may add to signs of an economic recovery while Bank of America Corp. reported a second quarterly loss. The yield on the 10-year note rose earlier to the highest level in more than three weeks after Google Inc. reported late yesterday that profit and sales beat estimates. They erased their advance as U.S. stock index futures fell after Bank of America, the biggest U.S. lender, posted a $1 billion third- quarter loss and General Electric Co. reported revenue that missed forecasts. “The data could inspire some volatility,” said Martin Mitchell, head of government-bond trading at the Baltimore unit of Stifel Nicolaus & Co. “Fixed-income investors still think the recovery will be slow in coming. Fixed-income investors are suspect of the rally in stocks.” Ten-year notes yielded 3.46 percent at 8:18 a.m. in New York, according to BGCantor Market Data. The 3.625 percent security due August 2019 was at 101 11/32. Yields rose from 3.22 percent two weeks ago, and reached 3.48 percent today, the most since Sept. 23. Output at factories, mines and utilities climbed 0.2 percent in September following increases of 0.8 percent and 1 percent in August and July, respectively, the Fed will say today, according to the median forecast of economists surveyed by Bloomberg. The report is due for release at 9:15 a.m. in Washington. Economic Outlook Futures on the Standard & Poor’s 500 Index slid 0.6 percent, reversing a gain of as much as 0.5 percent earlier. The Dow Jones Stoxx 600 Index of European shares declined 0.1 percent, erasing an advance of as much as 0.9 percent. Policy makers will be ready to tighten credit when the economic outlook “has improved sufficiently,” Fed Chairman Ben S. Bernanke said last week. Minutes of the central bank’s September meeting released Oct. 14 showed some policy makers raised their second-half economic projections based on improved housing markets, stabilizing consumer spending and a recovery in growth outside the U.S. Futures on the Chicago Board of Trade show a 56 percent chance the Fed will boost its target rate for overnight lending between banks by April. The Fed cut its benchmark rate to a range of zero to 0.25 percent at the end of 2008. U.S. debt handed investors a return of 5.9 percent over the past year, according to Merrill Lynch & Co.’s Treasury Master Index. German bunds gave 9.1 percent and Japanese government bonds delivered a 3.4 percent gain. Treasuries are down 0.7 percent this month, the indexes show. To contact the reporters on this story: Susanne Walker in New York at swalker33@bloomberg.net. Matthew Brown in London at mbrown42@bloomberg.net;

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