Treasury prices slide on unemployment report

Treasury prices dropped for a second straight day after the Labor Department said fewer workers filed for unemployment last week.

The yield on the 10-year note rose to 2.63 percent, up from 2.58 percent late Wednesday. Its price, which moves in the opposite direction from the yield, fell 46.875 cents to $99.968.

The interest rate the government pays on 10-year Treasury debt is used as a benchmark for a wide variety of mortgage and corporate borrowing.

The Labor Department reported 472,000 first-time claims for unemployment last week, less than the previous week and better than many economists expected.

Safer investments like Treasurys tend to sink on better-than-expected economic reports and rise on gloomier news. Treasurys took a hit on Wednesday as traders sold U.S. government debt after the Institute for Supply Management said manufacturing activity increased in August.

In other trading Thursday, the yield on the 30-year bond climbed to 3.72 percent from 3.65 percent the previous day. Its price slipped $1.313 to $102.844.

The 2-year note was the only Treasury security that held its ground in afternoon trading Thursday. Its price stayed flat at $99.75 with a yield of 0.50 percent.

The yield on the three-month T-bill was flat at 0.12 percent. Its discount was 0.13 percent.