SAN FRANCISCO (MarketWatch) -- Treasury prices modestly pared their gains on Monday after a strong report on U.S. industrial production countered concerns about a global economic recession.
Yields on two-year notes , which move inversely to prices, were flat at 1.22%.
Ten-year Treasury note yields fell 3 basis points to 3.7%.
Thirty-year Treasury yields fell 4 basis points to 4.20%.
On Wall Street, stocks slid after Citigroup said it was prepared to cut 50,000 jobs, one of a slew of glum corporate reports, and evidence of a global recession mounted. The Dow Jones Industrial Average and S&P 500 ) fell about 2%.
Ahead of the opening bell, the National Association for Business Economics said the United States is in for a prolonged recession that would likely drag into 2009. See full story.
But in October, output of the nation's factories, mines and utilities rebounded, the Federal Reserve reported.
Bond prices had gained ground overnight amid concerns that the global economy was headed into a deep recession.
"Treasurys are higher to open the week as global equities register their disappointment with the lack of concrete action from the weekend G20 meeting -- more "too little, too late" from policymakers," said analysts at Action Economics.
In addition, "economic woes remain a major concern to investors," they said.
Members of the so-called Group of 20 nations pledged to stimulate domestic demand, keep trying to stabilize the financial system and make sure the World Bank and the International Monetary Fund have enough resources to help countries overcome the crisis.
Against this backdrop, data showed that Japan's economy shrank in the third quarter, marking its second straight quarterly contraction and sending the nation into its first recession since 2001, as declining overseas demand for its goods hurt export-dependent industries. Read more.
Gross domestic product fell 0.1% in the July-to-September period from the previous quarter, or an annualized 0.4%, according to figures released by the government.
In the one glimmer of bright news, the Federal Reserve said industrial production increased 1.3% in October after falling a revised 3.7% in September, which was the biggest decline in 60 years.
