10-Year Treasury Auction Drives Yields Up

The Treasury Department's $19 billion auction of 10-year notes attracted greater foreign interest, but the sale also drew a higher-than-expected yield and ultimately disappointed investors.

Wednesday's auction drew a high yield of 3.99%, compared to forecasts of 3.97%, and the bid-to-cover ratio for the 10-year notes was 2.62, lower than the five-auction average of 2.88, according to Briefing.com.

While the indirect bidder take was fairly strong at 34.2%, which indicates high interest from foreign central banks, the higher-than-expected yield spooked the stock market. After the results were announced at 1 p.m. EDT, the 10-year note dropped 25/32 in price, pushing the yield higher to 3.96%, and the major U.S. indices slid to their worst levels of the session. ...