Treasuries Pull Back Well Off Highs To Close Nearly Flat

(RTTNews) - After showing a strong move to the upside in morning trading on Thursday, treasuries gave back ground as the day progressed.

Bond prices pulled back well off their highs and once again ended the day near the unchanged line. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.361 percent.

The pullback by treasuries came following the release of the results of the Treasury Department's auction of $12 billion worth of thirty-year bonds, which attracted average demand.

The thirty-year bond auction drew a high yield of 2.914 percent and a bid-to-cover ratio of 2.32, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.31.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Today's thirty-year bond auction came after the Treasury sold $24 billion worth of three-year notes on Tuesday and $20 billion worth of ten-year notes on Wednesday.

Treasuries initially benefited from weakness on Wall Street, as stocks came under pressure amid profit taking following recent strength.

However, stocks climbed well off their worst levels over the course of the trading day and are seeing only modest weakness late in the session.

On the U.S. economic front, the Labor Department released a report showing a modest rebound in initial jobless claims in the week ended January 7th.

The report said initial jobless claims rose to 247,000, an increase of 10,000 from the previous week's revised level of 237,000. Economists had expected jobless claims to climb to 255,000.

A separate Labor Department report showed a smaller than expected rebound in import prices in the month of December.

Trading on Friday may be impacted by reaction to closely watched reports on producer prices and retail sales in the month of December.