WASHINGTON (dpa-AFX) - After an early advance, treasuries gave back some ground over the course of the trading session on Thursday but managed to remain positive territory.
Bond prices finished the day moderately higher, extending the rebound seen during Wednesday's session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 2.7 basis points to 4.240 percent.
The ten-year yield added to the 4.9 basis point drop seen on Wednesday, pulling further off Tuesday's two-month closing high.
The early strength among treasuries came following the release of a Commerce Department report showing retail sales fell by much more than expected in the month of January.
The Commerce Department said retail sales slid by 0.8 percent in January after climbing by a downwardly revised 0.4 percent in December.
Economists had expected retail sales to edge down by 0.1 percent compared to the 0.6 percent increase originally reported for the previous month.
Excluding sales by motor vehicle and parts dealers, retail sales fell by 0.6 percent in January after rising by 0.4 percent in December. Ex-auto sales were expected to rise by 0.2 percent.
'Bond yields fell immediately following the release, as investors believe that a potential slowdown in economic activity could support rate cuts from the Federal Reserve later in the year,' said Sam Millette, Director of Fixed Income for Commonwealth Financial Network.
Buying interest waned over the course of the session, however, as a slew of other U.S. data offered a mixed view of the economy.
The Federal Reserve released a report showing industrial production in the U.S. unexpectedly edged slightly lower in the month of January.
The Fed said industrial production slipped by 0.1 percent in January compared to economist estimates for a 0.3 percent increase.
Meanwhile, the Labor Department released a separate report showing an unexpected decline in first-time claims for unemployment benefits in the week ended February 10th.
The report said initial jobless claims fell to 212,000, a decrease of 8,000 from the previous week's revised level of 220,000.
Economists had expected initial jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week.
The Labor Department also released a separate report this morning showing an unexpected increase U.S. import prices in the month of January.
A report on producer price inflation is likely to be in focus on Friday, while traders are also likely to keep an eye on reports on consumer sentiment and housing starts.
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