Treasuries were mixed, but dealers said the overall sentiment about the economy continued to tilt toward weakness.
"The market firmed up and it's feeding off the general consensus that we're having a weak economy," said David Winter, bond trader at
First Zions National Bank Capital Markets
. The 10-year benchmark note was edging up 1/32 to 97 10/32 and yielding 5.3595%. The 30-year Treasury bond lately gained 7/32 to 95 5/32, lowering its yield to 5.716%. Yields and prices move opposite each other.
Winter said the short end of the market is dipping due to some profit-taking after last week's gains. This afternoon, the two-year note, which is sensitive to changes in monetary policy, dipped 1/32 to 99 16/32, yielding 4.132%. Investors, haunted by the latest corporate profit concerns, fled the stock market on Friday into the safer havens of the short-term bonds.
Volume was light, however, on a day when there was no economic data to drive trading.
The Treasury market, which is a good proxy for where investors expect the economy to head, had to contend with mixed economic news last week. Longer-term securities drifted down Thursday after the National Association of Purchasing Management's
non-manufacturing index came in above expectations. The survey, which includes industries such as finance, insurance and communications, showed that the softness in the manufacturing sector wasn't as pervasive in the service sector. That report helped fuel expectations the economy is on its way to recovery.
But a day later, the crucial
employment report, released by the
on Friday showed the labor market remains soft.
"I would say the perception has gone from people looking for rebound in the third to fourth quarter, to people not seeing a rebound at all, maybe until the first quarter of next year," Winter said.