Interest rates rose in the bond market Wednesday after signs of improvement in the economy reduced demand for safe havens.
An afternoon report from the Federal Reserve about the economy sent a note of caution through the stock market but other numbers earlier in the day pushed investors out of Treasurys in favor of riskier assets.
The yield on the 10-year Treasury note that matures in February 2020 rose to 3.63 percent from 3.61 percent late Tuesday. Its price fell 3/32 to 100. Bond prices move opposite to their yields. The 10-year yield is tied to rates on mortgages and other consumer loans.
The drop in Treasurys followed a report that February saw the fastest growth in the services industries in two years. The Institute for Supply Management said its services index rose to 53 in February from 50.5 in January. Economists had forecast that the index to come in at 51.
Payroll company ADP said employers cut 20,000 jobs last month. Investors look to the reports for insight into the more important jobs numbers produced by the Labor Department. A weekly unemployment snapshot is expected Thursday and the government is scheduled to release its February employment report on Friday.
The unemployment rate is expected to increase to 9.8 percent from 9.7 percent in January. Economists also forecast that employers eliminated 50,000 jobs.
An early advance in stocks faded Wednesday afternoon after the Fed said the economy was improving but that growth was "modest."
The Dow Jones industrial average fell 9 points, while the broader Standard & Poor's 500 index rose less than a point.
The yield on the 30-year bond that matures in February 2040 rose to 4.59 percent from 4.57, while its price fell 9/32 to 100 20/32.
The yield on the two-year note maturing in February 2012 rose to 0.82 percent from 0.79 percent. Its price fell 1/32 to 100 4/32.
The yield on the three-month T-bill that matures June 3 rose to 0.13 percent from 0.12 percent and its discount rate stood at 0.14 percent.
© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.