Interest rates rose in the bond market Wednesday as bargain-hunting investors shifted money out of Treasuries and into riskier assets like stocks.
Weaker demand for government debt drove up interest rates, which had been falling for weeks. The yield on the benchmark 10-year Treasury note rose to 2.99 percent from 2.94 percent late Tuesday. Its price fell 53.125 cents to $104.3125.
The 10-year yield is linked to interest rates on mortgages and other consumer loans. It dropped below 3 percent last week for the first time since April 2009.
The uptick in rates came as traders went looking for beaten-down stocks after a seven-day losing streak in the Dow Jones industrial average. The Dow rose 275 points, ending back above 10,000. Financial and materials shares led the rally.
Investors seeking greater returns often dump safer assets like Treasuries when stocks are rising.
Investors have been crowding into Treasuries since major stock indexes began to fall from their 2010 highs in late April. Economic reports in the past two months have brought fears that the recovery will stall, not just slow.
Most economists say the chances of another recession are low but investors burned by the financial crisis of 2008-09 are maintaining demand for Treasuries. At the same time, mounting government debt in Europe has added to demand for debt backed by the U.S. government.
In other trading, the yield on the two-year Treasury note remained unchanged at 0.63 percent. Its price stayed at $100.
The 30-year bond yield rose to 3.97 percent from 3.89 percent. Its price rose $1.40625 to $107.09375.
The yield on the three-month Treasury bill rose to 0.16 percent from 0.15 percent.
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