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Treasury prices slipped Thursday, a day after a big jump, as stock prices recovered.
Results were solid from the week's final auction, this time of 30-year notes. But modest gains in stocks drew money away from bonds.
Investors moved money into riskier assets Thursday, buying up stocks and commodities and exiting positions in Treasurys and the dollar, both of which are seen as safe-haven assets.
The improved risk appetite came after aluminum maker Alcoa Inc. kicked off the second-quarter earnings season late Wednesday with better-than-expected results. Investors hope the report is a good indication of better earnings to come.
The decline in Treasurys also came after a big jump on Wednesday, which was triggered by strong demand at the government's 10-year note auction. The rise in prices had sent the yield on the benchmark 10-year Treasury note down to 3.31 percent -- its lowest level since May 20.
"We made a real big move yesterday that caught a lot of players off guard and I think they had to chase the rally and then they largely shed those positions today," said Kim Rupert, managing director of global fixed income analysis at Action Economics. "Sentiment changes on a dime and that is a reflection of how uncertain everybody is."
On Thursday, the 30-year auction's bid-to-cover ratio, a measure of demand, was 2.36 compared with 2.68 percent at an auction in June.
The 10-year Treasury note fell 27/32 to 97 19/32, pushing its yield up to 3.41 percent from 3.31 percent late Wednesday. The level of the yield Wednesday was the lowest since May 20. It reached an eight-month high of 4.01 percent on June 10.
The 30-year bond fell 1 26/32 to 99 3/32 and its yield jumped to 4.30 percent from 4.19 percent.
The two-year note fell 1/32 to 100 12/32 and its yield rose to 0.93 percent from 0.92 percent.
The yield on the three-month T-bill was unchanged at 0.17 percent. Its discount rate stood at 0.18 percent.
The cost of borrowing between banks fell. The British Bankers' Association said the rate on three-month loans in dollars -- the London Interbank Offered Rate, or Libor -- fell 0.02 of a percentage point to 0.51 percent.
