Treasuries Give Back Ground After Yesterday's Rally

(RTTNews) - Following the rally seen in the previous session, treasuries gave back some ground during trading on Thursday.

Bond prices moved to the downside early in the session and remained in the red throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.4 basis points to 2.162 percent.

With the increase on the day, the ten-year yield moved higher after ending Wednesday's trading at its lowest closing level in seven months.

The pullback by treasuries came as traders did some profit taking, cashing in on the sharp jump seen in the previous session.

Traders were also reacting to a slew of U.S. economic data, including a report from the Labor Department showing a bigger than expected drop in initial jobless claims in the week ended June 10th.

The report said initial jobless claims fell to 37,000, a decrease of 8,000 from the previous week's unrevised level of 245,000. Economists had expected jobless claims to drop to 242,000.

A separate report released by the Labor Department showed a bigger than expected drop in import prices in the month of May, reflecting a steep decline in prices for fuel imports.

The Labor Department said its import price index fell by 0.3 percent in May after rising by 0.2 percent in April. Economists had expected import prices to edge down by 0.1 percent.

The report also said export prices slid by 0.7 percent in May following a 0.2 percent increase in the previous month. Export prices had been expected to inch up by 0.1 percent.

Growth in Philadelphia-area manufacturing activity slowed in the month of June, according to a report released by the Federal Reserve Bank of Philadelphia.

The Philly Fed said its index for current manufacturing activity in the region decreased to 27.6 in June from 38.8 in May, although a positive reading still indicates growth. The index had been expected to drop to 24.0.

After reporting a contraction in regional manufacturing activity in the previous month, the Federal Reserve Bank of New York released a report showing a rebound in activity in the month of June.

The New York Fed said its general business conditions index shot up to 19.8 in June from a negative 1.0 in May, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 4.0.

The Fed also released a report this morning showing that U.S. industrial production was unchanged in the month of May.

The Fed said industrial production was flat in May after jumping by 1.1 percent in April. Economists had expected production to rise by 0.2 percent.

Meanwhile, homebuilder confidence in the U.S. unexpectedly decreased in the month of June, according to a report released by the National Association of Home Builders on Thursday.

The report said the NAHB /Wells Fargo Housing Market Index dropped to 67 in June from 69 in May. The decrease surprised economists, who had expected the index to inch up to 70.

Trading on Friday may be impacted by reaction to U.S. economic reports on housing starts and consumer sentiment.