U.S. Treasuries headed higher as investors continued to feel the heat from emerging market debt and the weight of profit worries, which today dragged the stock market lower.

The two-year note recently gained 2/32 to 99 22/32, lowering the yield to 5.042%. Yields and prices move in opposite directions. The 10-year benchmark note gained 9/32 to 98 19/32, yielding 5.188%, while the 30-year Treasury bond rose 17/32 to 96 31/32, yielding 5.585%.

One strategist pointed out that U.S. government securities are still benefiting from concerns about Argentina. Last week, worries about a financial meltdown in that country led investors to flee for the stable realm of U.S. government debt.

Roseanne Briggen, a Treasury market strategist at MCM Moneywatch, also said today's weakness in the stock market helped lift the prices of government debt, even though volume was light, partly because of the lack of economic data. But she said the market will be watching Wednesday's speech by Federal Reserve Chairman Alan Greenspan.

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The latest economic reports seem to suggest that the U.S. economy, while weak, is finally stabilizing. However, the bond market, which benefits when the Fed lowers short-term interest rates, is still keeping its fingers crossed that there's room for further rate cuts. The Fed has so far lowered interest rates to 3.75% -- the lowest level since May 1994. September's fed funds futures contract currently indicates that there is roughly a 70% the Fed will cut rates by another 25 basis points when the group next meets Aug. 21.

"We don't have any inflation, and that bodes well because the Fed can ease without the threat of higher prices," Briggen said. "But on the other hand, the economy's not heading further south."