By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices extended gains on Thursday, pushing yields down, after a report showed 359,000 Americans filed first-time claims for jobless benefits in the latest week, higher than analysts expected.
Yields on 10-year notes 10_YEAR -2.13% , which move inversely to prices, fell f basis points to 2.16%. A basis point is one one-hundredth of a percentage point.
Yields on 5-year notes 5_YEAR -2.31% dropped 6 basis points to 1.02%.
Thirty-year bond yields 30_YEAR -1.36% declined 4 basis points at 3.27%.
Jobless claims fell by 5,000 to 359,000 under the government’s newly revised formula for counting applications, which pushed the prior week’s numbers up.
Economists surveyed by MarketWatch projected claims would fall to 345,000. Read about jobless claims.
“The upshot is that the labor market recovery isn’t as healthy as we were earlier led to believe,” said Andrew Wilkinson, chief economic strategist at Miller Tabak.
Separately, data showed the U.S. economy grew 3% in the fourth quarter of 2011, unrevised from a prior estimate. See story on GDP.
Bond prices were up slightly before the U.S. data as a national strike in Spain against austerity measures reminded investors that the euro-zone sovereign debt crisis is still not decisively resolved. Read more on Spain’s strikes, budget.
Europe’s debt problems have been a major support for Treasury prices over the last year, pushing yields to record lows, as investors sought the relative safe-haven status of U.S. bonds.
“We are reminded today that European austerity measures and slowdowns/recession in growth are having real impacts on the ground,” said John Briggs, a bond strategist at RBS Securities.
Monthly, quarterly returns
Treasurys of all maturities have lost 0.9% in the month through Wednesday, according to an index compiled by Bank of America Merrill Lynch. This year, they’ve lost 1.2%, the worst start to a year since 2009.
Corporate bonds have slipped 0.4% this month but are still up 2.6% for the first quarter.
High-yield bonds have returned 3.3% this month, adding to the year’s gain of 5%.
