U.S. Treasury prices are rising as weak demand at auctions for Spanish government debt led traders to dump that country's bonds.
Spain's borrowing costs rose sharply Wednesday after Madrid failed to generate strong interest in an auction of three- to eight-year bonds.
Fears that Spain will have difficulty raising money from the bond market led investors to sell the country's debt, pushing yields higher. The yield on Spain's benchmark 10-year bond shot up to 5.61 percent from 5.40 percent earlier Wednesday. Italy's borrowing costs also rose.
As traders sold European bonds, they bought safer investments such as German bunds and U.S. Treasurys. The yield on the 10-year Treasury note fell to 2.25 percent from 2.29 percent late Tuesday as of 10:30 a.m. Eastern.