By Sam Mamudi, MarketWatch
NEW YORK (MarketWatch) — Treasury prices fell early Wednesday, pushing yields higher, as good news from Europe stoked investor confidence and boosted stocks on Wall Street.
Yields on 10-year notes (UST10Y 3.40, +0.06, +1.77%) moved up 5 basis points at the latest, to 3.40%, while 2-year (UST2YR 0.62, +0.03, +4.75%) yields were up 1 basis point, to 0.61%.
Yields move inversely to prices. A basis point is one-hundredth of a percentage point.
Before the opening of the New York market, Portugal’s government sold 1.25 billion euros ($1.62 billion) of bonds, easing fears of impending crisis in the euro zone. Read about Portugal’s bond auction.
The successful auction helped European stock markets gain and saw U.S. stock futures move solidly higher. Read Wednesday’s Indications column.
Also Wednesday, the Treasury Department will at 1 p.m. Eastern auction $21 billion in 10-year notes.
The sale will be the second of three this week; the Treasury sold $32 billion in 3-year notes for a yield of 1.03% on Tuesday. Bidders in that auction offered to buy 3.06 times the amount of bonds on offer, close to the average for the last four 3-year auctions.
The 10-year notes up for bid Wednesday “are also relatively cheap on the curve but directionally risky as we view the current rally as a correction in a rising yield environment,” wrote John Spinello, a Treasury strategist at Jefferies & Co. in a research note.
The third auction, to take place on Thursday, will see the sale of $13 billion of 30-year Treasury bonds. Yields (UST30Y 4.54, +0.05, +1.07%) on the long bond rose 4 basis points to 4.53% at the latest.
