Treasuries Close Slightly Higher After Choppy Session

(RTTNews) - After seeing early strength, treasuries pulled back over the course of the trading session on Tuesday but still closed slightly higher.

Bond prices showed a lack of direction in afternoon trading before ending nearly unchanged. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 2.243 percent.

The slightly higher close by treasuries came after the Treasury Department's auction of $35 billion worth of five-year notes attracted average demand.

The five-year note auction drew a high yield of 1.670 percent and a bid-to-cover ratio of 2.52, while the ten previous five-year note auctions had an average bid-to-cover ratio of 2.47.

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

On the U.S. economic front, the Commerce Department released a report this morning showing that economic activity increased by more than previously estimated in the third quarter.

The report said real gross domestic product climbed by 2.1 percent in the third quarter compared to the previously reported 1.5 percent increase. The upward revision matched economist estimates.

Meanwhile, the Conference Board released a separate report unexpectedly showing a substantial deterioration in consumer confidence in the month of November.

The Conference Board said its consumer confidence index tumbled to 90.4 in November from an upwardly revised 99.1 in October.

The steep drop came as a surprise to economists, who had expected the index to climb to 99.6 from the 97.6 originally reported for the previous month.

Trading on Wednesday may be impacted by the release of a slew of U.S. economic data, including reports on weekly jobless claims, durable goods, personal income and spending, and new home sales.