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Treasuries were sharply lower after the National Association of Purchasing Management released stronger-than-expected manufacturing data for August. The manufacturing activity index rose to 47.9 in August from 43.6 in July, easily beating economists expectations and spreading optimism that industrial output is starting to recover. Because the data was better than the forecasts, and perceived as inflationary, government fixed-income securities sold off.

Around 4 p.m. EDT, the two-year note was down 10/32 to 99 22/32, raising the yield to 3.790%. Yields and prices move in opposite directions. The 10-year note lost 1 4/32 to 100 4/32, taking the yield up to 4.982%. The 30-year bond plunged 1 22/32 to 98 11/32, yielding 5.488%.

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