Treasuries Close Firmly Positive As Traders Shrug Off Fed Worries

(RTTNews) - While worries about the outlook for the Federal Reserve's asset purchase program weighed on stocks on Wednesday, treasuries showed a notable move to the upside on the day.

Bond prices moved steadily higher over the course of the session before closing firmly in positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 4.2 basis points to 2.60 percent.

The strength among treasuries came as bond traders largely shrugged off comments from Fed officials reiterating that the central bank is likely to begin scaling back its asset purchases later this year.

The remarks were largely seen as old news by bond traders even though the comments contributed to another day of weakness on Wall Street.

Treasuries saw some further upside in afternoon trading following the release of the results of the Treasury Department's auction of $24 billion worth of ten-year notes.

While the auction attracted below average demand, the high yield of 2.62 percent was in line with the when issued, increasing the appeal of bonds.

The ten-year note auction had a bid-to-cover ratio of 2.45, while the ten previous auctions had an average bid-to-cover ratio of 2.81.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

Finishing off this week's series of long-term securities auctions, the Treasury is due to sell $16 billion worth of thirty-year bonds on Thursday.

Trading on Thursday could also be impacted by the release of the Labor Department's weekly jobless claims report, with claims expected to rebound from a five-year low.