Treasurys maturing in two years gained Tuesday after a report showed consumer confidence unexpectedly declined to a record low.
Two-year note yields , which move in the opposite direction of prices, fell 3 basis points to 0.76%. A basis point is 0.01%.
Ten-year note yields ) stayed up 2 basis points to 2.13%.
The Conference Board's consumer confidence index declined to 38 in December from 44.9 last month as worries increased about current business and job-market conditions.
"Employment and the broader state of the economy clearly outweighed cheaper gas," said Ian Lyngen, a bond strategist at RBS Greenwich Capital Markets.
Economists surveyed by MarketWatch expected the private index to read 45.8.
The Chicago purchasing managers index inched higher, though business activity in the Chicago region remained weak in December. The index rose to 34.1 from 33.8 in November, a little better than some economists had expected, analysts at RBS Greenwich said.
Readings below 50 indicate overall business contraction.
A report on manufacturing activity around Kansas City is also expected to remain negative.
Treasurys remained lower after the Case-Schiller home-price index declined 2.2% in October from the previous month. Home prices have dropped 18% in the past year.
Trading volume has been very light and may remain so throughout another holiday-shortened week.
The Securities Industry and Financial Markets Association recommended that bond trading end at 2 p.m. Eastern time on Wednesday and remain shuttered on Thursday for New Year's Day.
A deteriorating economic outlook and a spreading contagion in financial markets that triggered a massive flight to safety among investors have led Treasurys of all maturities to return 14.7% this year, according to an index compiled by Merrill Lynch.
Earlier this month, yields fell to the lowest on the Treasury's records. Ten-year yields fell to 2.03% on Dec. 18 and two-year note yields fell as low as 0.62% on Dec. 16.
Among other astonishing occurrences in the Treasury market this year, more than once three-month bill rates fell to 0%.
