Treasurys fell slightly early Wednesday, sending yields higher after the Obama administration released details of a $50 billion program to help up to a million "at risk" homeowners modify their mortgages. Down slightly ahead of the plan, yields on benchmark 10-year Treasury notes rose 3 basis points to 2.684%. Two-year notes were also lower, with their yields rising 4 basis points, or 0.04 percentage point, to 0.911%. Yields on 30-year bonds, however, fell 2 basis points to 3.459%. Treasurys had rallied Tuesday as stocks plunged amid concerns about credit deterioration in East Europe and Russia. But stocks regained some ground early Wednesday before turning slightly negative, with the Dow Jones Industrial Average down 29 points to 7,523. "Profit taking [on bonds] has been ... evident this morning after yesterday's big gains," analysts at Action Economics said in a note. Bond investors, they said, now wanted to get "firm details" on the Obama housing plan. The administration's plan seeks to help homeowners who took out loans that were owned or guaranteed by Fannie Mae or Freddie Mac to refinance through the two institutions. It also allows certain families to refinance at lower interest rates. The program also includes a $75 billion homeowner stability initiative that the administration believes could help 3 million to 4 million homeowners. Housing sinks further Data released early Wednesday continued to paint a grim picture for the U.S. economy. Construction on new U.S. homes plunged 16.8% in January, much worse than expected. Housing starts have dropped at double-digit rates for three straight months. Starts were also down a record 56% in the past year and down 79% from their peak three years ago. Building permits fell 4.8% to a seasonally adjusted annual rate of 521,000, also a record low. See full story on latest housing data. Industrial production slumped 1.8% in January, roughly in line with the forecasts of economists surveyed by MarketWatch.

Source