Rates trade in tight range on uneven economic data

Interest rates were mixed in the bond market Friday after uneven economic reports gave investors conflicting signals.

Long-term Treasury prices rebounded after sliding Thursday. The rise in prices pushed yields lower.

The yield on the 10-year Treasury note that matures in February 2020 fell to 3.70 percent in late trading from 3.73 percent late Thursday. Its price rose 8/32 to 99 11/32. The 10-year yield is tied to interest rates on mortgages and other consumer loans.

A drop in consumer confidence pushed up demand for safe-havens. The preliminary Reuters/University of Michigan consumer sentiment index for March slipped to 72.5 from 73.6 in late February. Investors were concerned that consumers less confident wouldn't be as likely to spend.

At the same time, the Commerce Department said business inventories were flat in January. Analysts were looking for an increase as a sign that businesses were restocking store shelves to meet greater demand.

There were bright spots. The Commerce Department also said that retail sales rose 0.3 percent last month. Traders had been expecting a drop in part because of heavy snow storms.

Yields for long-dated Treasurys fell a day after a Treasury Department auction of $13 billion in 30-year bonds attracted robust demand. Buyers were attracted to the high-yield that can be had in long-term debt compared with less risky, but lower-yielding notes.

In other trading, the yield on 30-year bond that matures in February 2040 fell to 4.63 percent from 4.67 percent. Its price rose 22/32 to 100.

The yield on the two-year note that matures in February 2012 was flat at 0.96 percent. The price was unchanged at 99 27/32.

The yield on the three-month T-bill that matures June 10 was unchanged at 0.14 percent. Its discount rate was 0.14 percent.

(This version CORRECTS in sevent paragraph to read that yields fell)