Treasuries Close Higher After Initially Showing A Lack Of Direction

(RTTNews) - Treasuries moved higher over the course of the trading session on Thursday, adding to the gains posted in the previous session.

Bond prices initially showed a lack of direction but moved to the upside as the day progressed. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 1.5 basis points to 2.296 percent.

Treasuries saw continued strength following the release of the results of the Treasury Department's auction of $28 billion worth of seven-year notes, which attracted above average demand.

The seven-year note auction drew a high yield of 2.084 percent and a bid-to-cover ratio of 2.73, while the ten previous seven-year note auctions had an average bid-to-cover ratio of 2.51.

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

In U.S. economic news, the Labor Department released a report showing an unexpected increase in initial jobless claims in the week ended April 22nd.

The report said initial jobless claims climbed to 257,000, an increase of 14,000 from the previous week's revised level of 243,000.

The increase surprised economists, who had expected jobless claims to edge down to 241,000 from the 244,000 originally reported for the previous week.

A separate report released by the Commerce Department showed that new orders for manufactured durable goods climbed by less than expected in the month of March.

The Commerce Department said durable goods orders rose by 0.7 percent in March after jumping by a revised 2.3 percent in February.

Economists had expected orders to surge up by 1.2 percent compared to the 1.8 percent increase that had been reported for the previous month.

Excluding a jump in orders for transportation equipment, durable goods orders edged down by 0.2 percent in March after climbing by 0.7 percent in February.

The National Association of Realtors also released a report showing a pullback in pending home sales in the month of March.

NAR said its pending home sales index fell by 0.8 percent to 111.4 in March after jumping by 5.5 to 112.3 in February. Economists had expected pending home sales to drop by 1.0 percent.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

Trading on Friday may be impacted by reaction to reports on first quarter GDP, consumer sentiment, and Chicago-area business activity.