Interest rates sank in the bond market Tuesday as investors sought safety while Europe's debt crisis deepened.
Market participants have been worried that Greece could default on its debt and that the trouble there would spread to other weak European economies like Spain or Portugal.
Those concerns are overshadowing increasingly upbeat domestic economic reports in the U.S, helping to drive up Treasury prices and push down their yields. Investors tend to bid up prices of Treasuries if they expect turmoil in their financial markets.
The yield on the 10-year Treasury note fell to 3.62 percent in afternoon trading Tuesday, after trading as low as 3.61 percent earlier in the day. It stood at 3.69 percent late Monday. Its price rose 56.25 cents to $100.0625 on Tuesday.
The yield on the 10-year note, which matures February 2020, is linked to rates on mortgages and other consumer loans. It has dipped over the past month after briefly rising to 4 percent in April, its highest level since June.
"The market is not impressed with the Greek bailout, nor Greece's ability to avert a future debt crisis," said Kevin Giddis, managing director of fixed income at Morgan Keegan, in a research note.
The uneasiness is over whether a $144 billion bailout package for Greece will be approved by the 15 European Union members that would pay much of the cost. One concern in the markets is that the size of the Greek bailout package could make it harder for the EU to rescue other countries that might need help.
"The bailout for Greece is widely held as being too little, too late," Giddis said.
Stronger economic reports on factory orders and home sales did little to ease Treasury prices.
The Commerce Department said orders to U.S. factories rose 1.3 percent in March. Analysts expected a drop.
The National Association of Realtors said its index of sales agreements for previously occupied homes rose a stronger-than-expected 5.3 percent in March.
In other trading, the yield on the 2-year note that matures in April 2012 fell to 0.96 percent from 1.01 percent, while its price rose 6.25 cents to $100.0625.
The yield on the 5-year note that matures in April 2015 fell to 2.39 percent from 2.47 percent. Its price rose 31.25 cents to $100.50.
The yield on the 30-year bond that matures in February 2040 fell to 4.44 percent from 4.53 percent. Its price rose $1.46875 to $103.03125.
The yield on the three-month Treasury bill that matures August 5 was rose to 0.16 percent from 0.15 percent.
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