Yield on two-year notes reach record lows -- nder 1% NEW YORK (MarketWatch) -- Treasury prices surged Thursday, pushing yields on all maturities to multi-year lows, as investors reacted to Labor Department data showing initial claims for jobless benefits jumped more than expected to the highest since 1992. Ten-year note yields dropped 15 basis points to stand at 3.19%, after touching the lowest since 2003. A basis point is the equivalent of one one-hundredth of a percentage point. Two-year note yields retreated as far as 0.97%, the lowest on record, and recently traded at 1%. Bond prices move inversely to their yields. Weekly U.S. initial jobless claims rose by 27,000 to 542,000 in the week ended Nov. 15, the highest since July 1992, the Labor Department said. And in a vivid indication of how it's getting more difficult to find a new job, continuing unemployment claims rose by 109,000 to 4.01 million in the week ended Nov. 8 -- the highest since the early 1980s. See Economic Report. David Ader, head of government bond strategy at RBS Greenwich Capital, called the data "ashocker." Yields on 30-year bonds also fell to the lowest ever, at 3.76%. "The long end of Treasurys is on fire," Andrew Brenner, Andrew Brenner, co-head of structured products and emerging markets at MF Global, wrote in an e-mail. The Philadelphia Federal Reserve's report on manufacturing in the region is also due out at 10 a.m. Eastern. Gains in shorter-term notes have come even as the Treasury Department is expected to announce later Thursday that it will sell a record amount of two- and five-year notes next week.

Source