By Gavin Finch July 28 (Bloomberg) -- Ten-year U.S. Treasuries advanced after European equities and U.S. stock-index futures slid, stoking demand for the relative safety of government debt. Two-year notes were little changed as the U.S. prepared to sell $42 billion of the securities . The Treasury is planning to auction a record $115 billion of bonds this week. Futures on the Standard & Poor’s 500 Index fell 0.3 percent, while Europe’s Dow Jones Stoxx 600 Index reversed an earlier advance, declining 0.2 percent. “The equity markets remain the dominant theme for Treasuries,” said Sean Maloney, a fixed-income strategist at Nomura International Plc in London. The yield on the 10-year note fell 2 basis points to 3.71 percent as of 10:54 a.m. in London, according to BGCantor Market Data. The 3.125 percent security maturing in May 2019 rose 5/32, or $1.56 per $1,000 face amount, to 95 8/32. A basis point is 0.01 percentage point. The yield climbed to 3.76 percent yesterday, the highest level since June 22. The yield on the two-year note was at 1.03 percent, 2.67 percentage points less than 10-year securities. The spread widened to 2.71 percentage points yesterday, the most since June 5. Two-year notes have handed investors a return of 0.4 percent this year, compared with a 9.9 percent loss for holders of 10- year notes, Merrill Lynch & Co. indexes showed. To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

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