Treasuries Close Modestly Lower Amid Rally On Wall Street

(RTTNews) - Treasuries moved modestly lower over the course of the trading day on Monday, giving back ground after turning higher in the previous session.

Bond prices initially showed a lack of direction but moved to the downside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.6 basis points to 2.75 percent.

The modest weakness among treasuries came amid a rally by stocks, which lifted the S&P 500 to a new record intraday high.

Peter Boockvar, chief market analyst at the Lindsey Group, suggested that stocks were benefiting from enormous faith in the Federal Reserve.

"Faith that either [Fed Chair Janet] Yellen will blink in the face of the weak economic data and not follow thru with a continuation of tapering," Boockvar said.

He added, "Or the belief that the economy will soon rebound off the weather induced weakness and thus the Fed will be able to pull off a seamless end to QE without much economic impact."

Nonetheless, bond traders seemed reluctant to make any significant moves amid the lack of major U.S economic data.

Later this week, trading could be impacted by the release of reports on new home sales, durable goods orders, and fourth quarter GDP.

Yellen is also scheduled to testify before the Senate Banking Committee on Thursday after her originally scheduled appearance before the committee was postponed due to a snowstorm in Washington.

Reports on home prices and consumer confidence are likely to attract some attention on Tuesday, while bond traders may also keep an eye on the results of the Treasury Department's auction of $32 billion worth of two-year notes.