Treasury Prices Fall for First Time in 3 Days

Treasury prices fell Tuesday, breaking three straight days of gains.

The drop in Treasurys pushed yields higher on the final day of the April-June quarter. The gain in yields could make consumer loans more expensive. Long-term Treasury yields are tied to interest rates on mortgages and other loans.

Treasurys held their losses in check, however, after a private research group said consumer confidence unexpectedly fell in June. Investors had been expecting the Conference Board's measure of consumer sentiment would remain essentially flat.

After gains in recent weeks, traders have been warning that a jump in rates could derail the economy's ability to pull out of recession.

In late trading, the yield on the benchmark 10-year Treasury note rose to 3.54 percent from 3.48 percent late Monday.

Yields on long-term Treasurys jumped to their highest levels of the year in June as investors worried that the massive amount of debt the government is auctioning would overwhelm demand. But some unease has lessened as buyers have been showing a solid appetite for U.S. debt at most auctions.

The drop in Treasury prices came even as stocks fell. Often investors turn to the safety of government debt when stocks are sliding.

The 10-year Treasury note's price fell 14/32 to 96 19/32.

The 30-year bond's yield rose to 4.34 percent from 4.29 percent. Its price fell 26/32 to 98 17/32.

The two-year note's yield rose to 1.13 percent from 1.10 percent, and its price fell about 1/32 to 100.

The three-month T-bill's yield was at 0.18 percent, flat with Monday. The discount rate was 0.19 percent.

Borrowing costs between banks were unchanged. The London Interbank Offered Rate, or Libor, for three-month dollar loans was flat at 0.60 percent.

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