Treasury prices fall, pushing rates higher, after Treasury auction draws weak demand

Interest rates rise following weak note auction

NEW YORK — Long-term interest rates rose for a third straight day in the bond market after a government debt auction drew weak demand.

The poor showing at the Treasury department’s sale Thursday of $16 billion in 30-year notes pushed prices lower and interest rates higher.

One measure of demand, the bid-to-cover ratio, came in at 2.36. The measure was a stronger 2.68 at the last auction in January.

It was the third disappointing auction of the week. Sales of three-year and 10-year notes earlier in the week also were weaker than at other recent auctions.

The yield of the 30-year bond maturing in November 2039 rose to 4.67 percent in late trading from 4.64 percent on Wednesday and its price fell 14/32 to 95 9/32.

Meanwhile, the yield on the 10-year Treasury note that matures in February 2020 rose to 3.73 percent from 3.69 percent late Wednesday as its price slipped 3/32 to 99 7/32. The 10-year yield is used to determine interest rates on mortgages and other consumer loans.

Treasury prices also fell as stocks pushed higher. The stock market jumped after European leaders agreed to help Greece, which is struggling with high deficits. Investors had been worried that financial problems there would spill into other European Union countries and hamper a global economic recovery.

The Dow Jones industrial average rose 106 points.

The yield on the two-year note that matures in January 2012 fell to 0.88 percent from 0.89 percent, while its price was flat at 99 31/32.

The yield on the three-month T-bill that matures May 13 fell to 0.09 percent from 0.10 percent. Its discount rate was 0.09 percent.