By Laura Mandaro and Greg Morcroft, MarketWatch SAN FRANCISCO (MarketWatch) — Treasury prices fell Tuesday as investors shed safe-haven holdings in favor of stocks and commodities, and ahead of a series of government auctions that are set to bring $72 billion of new notes and bonds to the market this week. Yields on the 10-year note 10_YEAR +3.88% , which move inversely to prices, rose 6 basis points to 1.63%. On a closing basis, this would be the benchmark‘s highest yield since late June, according to FactSet. The 10-year note is used to price mortgages and commercial loans. Yields on the 10-year note had reached a record low under 1.4% last month as concerns about a potential Spanish default and Greece’s fragile financial situation sent investors clamoring for safety, including Treasurys, German bunds, and the U.S. dollar. Yields on the 2-year note 2_YEAR +6.35% were up nearly 2 basis points at 0.26%. One basis point is 1/100th of a percentage point. “We’re looking at a continuation of a pullback that began in early July,� said John Canavan, market analyst for Stone & McCarthy Research Associates. The overriding factors had less to do with Tuesday’s news flow than with an extended assessment of some recent events -- in particularly, a U.S. jobs report Friday that showed non-farm payrolls gaining by a surprisingly strong 163,000 last month, and statements from the European Central Bank’s chief that indicated the bank would intervene to support troubled euro-zone nations’ bonds if requested. Read more on Friday's jobs report. Federal Reserve officials have continued to indicate willingness to pump more stimulus into the economy if growth falters substantially, Canavan added. Boston Federal Reserve Bank President Eric Rosengren on Tuesday said the U.S. economy is “only treading water� and central bankers need to launch another, open-ended asset purchase program to spur demand. Read more on Rosengren. “Broadly speaking, we’re seeing an unwinding of the risk-aversion trade,� said Canavan. “While economic weakness and low inflation expectations have held rates low, they’re not fully responsible for the extent of the decline in rates – that was due to the risk-off trade and a flight to safety.� U.S. stocks extended gains into a third day, oil rose to a three-month high, and the U.S. dollar fell on Tuesday. Debt sales Bonds are also sliding ahead of the first of three major U.S. debt auctions this week. The U.S. Treasury will sell $32 billion of 3-year notes 3_YEAR +7.21% later Tuesday. Also this week, it will offer $24 billion in 10-year notes 10_YEAR +3.88% and $16 billion in 30-year bonds 30_YEAR +2.56% . Laura Mandaro is a MarketWatch editor, based in San Francisco. Greg Morcroft is MarketWatch's financial editor in New York.

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