The Treasury market had to struggle to stay awake today, as the market was extremely quiet. Bonds were slightly weaker in the morning, extending their losses in the afternoon as stocks steadily improved.

This morning's economic reports, which include the

National Association of Purchasing Management's

purchasing managers' manufacturing index, were reasonably strong, but did not cause much consternation in the Treasury market.

"The flows have been alarmingly dead," said John Canavan, Treasury market strategist at

Stone & McCarthy

in Princeton, N.J. "Bonds had a better tone at the open but found no follow-through."

Tracker

GovPX

reported volume was down 36% when compared with the average Monday during the past month, with just $17.4 billion shares changing hands.

The benchmark 10-year Treasury bond was lately down 13/32 to 101 19/32, moving the yield up to 6.276%. The two-year note performed slightly better, a reverse from last week, down just 2/32 to 99 10/32, yielding 6.736%. That's a slight change from last week, when the short end bore the brunt of increasingly negative market sentiment, which is gearing itself up for several more interest-rate increases from the

Federal Reserve

.

Short-dated securities react most strongly to expected changes in Fed monetary policy, and they were hurt last week after the release of Thursday's

Employment Cost Index and

Gross Domestic Product data. That was turned around a bit today by traders selling long-dated securities and buying back short-dated ones, but as stocks improved, the two-year note was sold.

The fortunes of the fixed income market have been chiefly linked with the performance in equities. With stocks stronger across the board, bonds are weak.

"There's a little money moving out of bonds into stocks," said Charlie Reinhard, chief market strategist at

ABN Amro

. "The NAPM report did not contain many surprises, but it's still likely that the Fed is going to raise rates -- we think they'll raise by 50 basis points."

The NAPM, a nationwide survey of manufacturing conditions, fell to 54.9 in April from 55.8 in March. A reading above 50 indicates expansion in the manufacturing sector, and this index has been above 50 for the last 15 months. While the index's prices-paid component is slowing, the employment and supplier deliveries components are still increasing, indicating still-tighter labor markets, and that suppliers cannot keep up with the incredible pace of consumer demand. The supplier deliveries component increased to 55.6 from 54.1.

Construction spending

rose 1.4% in March, the

Commerce Department

said this morning, after a revised 1.2% gain in February.

Currency and Commodities

With Europe closed for the May Day holiday, currency trading was light. The dollar rose against the yen and fell slightly against the euro. It lately was worth 108.74 yen, up from 106.41. The euro was worth $0.9169, up from $0.9120. For more on currencies, see TSC's

Currencies column.

Crude oil for June delivery at the

New York Mercantile Exchange

rose to $25.90 a barrel from $25.74.

The

Bridge Commodity Research Bureau Index

rose to 215.89 from 211.94.

Gold for June delivery at the

Comex

fell to $274 an ounce from $278.70 yesterday.