Treasurys declined Thursday, pushing rates up for a second day, after the government said it will sell $94 billion in short-term debt next week, a little less than analysts expected.
Treasurys also faced competition as new corporate debt deals lured bond buyers.
Ten-year note yields ) rose 8 basis points to 2.84%. A basis point is 0.01%.
Two-year note yields increased 3 basis points to 0.99%, after passing 1% earlier.
The Treasury Department said it will sell $40 billion in two-year notes on Tuesday and $32 billion in five-year notes on Wednesday.
The amount of two-year debt is $1 billion less than predicted by Wrightson ICAP, a research firm specializing in government finance, though the five-year note sale is $1 billion more than it forecast. Both amounts are still the most ever for a single auction of those maturities.
The Treasury will also sell seven-year notes for the first time since 1993, with $22 billion on Thursday. That's less than Wrightson anticipated.
The rising debt sales have come as the government finances multiple programs to stabilize financial markets as well as the latest economic stimulus package. Bond yields tend to rise when supply increases because investors demand a higher return to take on additional debt.
At the same time, Treasurys are getting stiff competition from a slew of corporate bond deals that offer investors higher yields than government debt.
On Wednesday, companies sold $29.55 billion in new debt, the busiest issuance day in at least the 15 years that Informa Global Markets has been tracking sales.
That includes $16 billion in bonds from Roche Holdings , more than many analysts had anticipated and the largest deal ever, analysts at Informa said.
Housing finance giant Freddie Mac also priced $10 billion in three-year notes.
"Good reception for the plethora of Wednesday's U.S. corporate and agency new issues also weighed, as it signals the wavering of the flight-to-safety trade," said Roseanne Briggen, a Treasury market analyst at Informa.
Treasurys stayed lower earlier after government reports showed the trend in claims for unemployment benefits indicated the job market weakened this month. See Economic Report on jobless claims.
A separate report said wholesale prices increased more than expected in January. See Economic Report on producer prices.
A survey from the Federal Reserve Bank of Philadelphia showed manufacturing in that region continued to deteriorate this month. The index fell to -41.3 in February, the lowest in 18 years, from -24.3 last month. Readings below zero show that more manufacturing firms reported worsening conditions than reported improvements.
