Treasuries Move Notably Lower Amid Strength On Wall Street

(RTTNews) - Extending a recent downward trend, treasuries showed a notable move to the downside during trading on Tuesday.

Bond prices came under pressure in early trading and saw further downside late in the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 5.4 basis points to 2.327 percent.

The continued weakness among treasuries came amid strength on Wall Street, with the tech-heavy Nasdaq reaching a new record high.

Stocks benefited from a positive reaction to upbeat earnings news from a number of well known companies, including DuPont (DD), Caterpillar (CAT) and McDonald's (MCD).

On the U.S. economic front, the Commerce Department released a report showing that new home sales saw a substantial increase in the month of March.

The Commerce Department said new home sales jumped by 5.8 percent to an annual rate of 621,000 in March from a revised 587,000 in February.

Economists had expected new home sales to drop to a rate of 585,000 from the 592,000 originally reported for the previous month.

Meanwhile, a separate report from the Conference Board showed a bigger than expected pullback in consumer confidence in the month of April.

The Conference Board said its consumer confidence index fell to 120.3 in April from a revised 124.9 in March. Economists had expected the index to dip to 123.1 from the 125.6 originally reported for the previous month.

"Consumer confidence declined in April after increasing sharply over the past two months, but still remains at strong levels," said Lynn Franco, Director of Economic Indicators at The Conference Board.

She added, "Despite April's decline, consumers remain confident that the economy will continue to expand in the months ahead."

Meanwhile, the Treasury Department's auction of $26 billion worth of two-year notes attracted above average demand.

The two-year note auction drew a high yield of 1.280 percent and a bid-to-cover ratio of 2.85, while the ten previous two-year note auctions had an average bid-to-cover ratio of 2.67.

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

Amid a light day on the U.S. economic front, trading on Wednesday may be impacted by reaction to the results of the Treasury Department's auction of $34 billion worth of five-year notes.