Treasuries posted modest gains in a session dominated by the first buyback of Treasury securities in 70 years and a very heavy corporate new-issue calendar. Late-day rallies in oil and stocks tamped priced down from higher levels.

Early in the session, Treasury notes and bonds popped higher in sympathy with European government bonds, which were reacting principally to

yesterday's big retreat by oil prices.

With no major economic releases to tug them in either direction, they hung onto the gains until the 11 a.m. EST offering deadline for the buyback.

In the buyback, the Treasury Department accepted from dealers offers to sell $1 billion of 30-year bonds issued from 1985 to 1990. All that was as-expected. On Tuesday, the department had announced that the buyback -- the first of many expected this year -- would seek up to $1 billion of 30-year bonds in that maturity range.

The outcome is tricky to interpret. In a standard Treasury auction, when new bonds or notes are sold to dealers, just one issue is involved and the yield at which it is sold can be compared to the market's level at the time of sale.

By contrast, in today's reverse auction, numerous issues were involved and the Treasury didn't disclose how much it paid for them individually. Still, people involved in the process and other market analysts said the department had no difficulty getting its bonds from among the $8.6 billion offered at prices at or below where comparable securities were trading at the time.

"You had to be fairly aggressive for your offerings to be accepted," said a trader at a primary dealership.

The morning rally foiled the government to an extent, by forcing prices higher. "But the Treasury wasn't doing us any favors by buying at expensive prices," the trader said. "They only had to take offers that were cheap to fairly cheap at the time of the operation."

Dealers "had to be aggressive with pricing to have anything executed," concurred Ken Logan, managing analyst at

Thomson Global Markets

in Boston. The proof, he said, lay in the fact that the market maintained its bid after the results were announced at around 11:30 a.m.

The buyback program, which the Treasury has said will take up to $30 billion of long-maturity issues out of circulation this year, is one of the ways it is dealing with the federal budget surplus, which reduces its need to borrow. By buying back old issues while continuing to issue new ones, the department helps maintain the liquidity of its securities.

But the Treasury market also benefited from demand related to corporate new issuance, Logan said. Hedging strategies for new corporate bonds can involve purchasing of Treasuries, either before or after the bonds are priced.

This week's corporate calendar is "monstrous," said John Atkins, market analyst at

IDEAglobal.com

. Investment-grade issuance since Monday exceeds $10 billion, and the total for the week could wind up exceeding $14 billion, he said. That would be the heaviest corporate calendar in nearly a year. "It looks as if people are trying to get in ahead of the Fed," Atkins said, referring to the next scheduled meeting of the

Federal Open Market Committee

on March 21, which is expected to produce another hike in the

fed funds rate

The benchmark 10-year Treasury note, up as much as 21/32 this morning, ended up 10/32 at 101 3/32, trimming its yield 4.3 basis points to 6.359%. It outperformed shorter-maturity issues. The erstwhile benchmark 30-year Treasury bond, up as much as 26/32 earlier, ended up 1/32 at 101 7/32, dropping its yield a fraction of a basis point to 6.160%.

At the

Chicago Board of Trade

, the June

Treasury futures contract finished up 3/32 at 94 24/32.

Economic Indicators

The weekly tally of

initial jobless claims

rose slightly, to 280,000 from 275,000. Meanwhile, the four-week average fell to 277,250, the lowest level in nearly 30 years.

Currency and Commodities

The dollar weakened against the yen and the euro. It lately was worth 106.61 yen, down from 107.23 yesterday. The euro was worth $0.9663, up from $0.9605 yesterday. For more on currencies, please take a look at

TSC's

new

Currency Watch column.

Crude oil for April delivery at the

New York Mercantile Exchange

rose to $31.69 a barrel from $31.26 yesterday.

The

Bridge Commodity Research Bureau Index

rose to 214.71 from 213.61 yesterday

Gold for April delivery at the

Comex

rose to $292.70 an ounce from $290.40 yesterday.