Treasurys fall as manufacturing data lifts stocks

Treasury prices fell Monday, pushing their yields higher, as stronger-than-expected reports on manufacturing and housing allay some concerns about the strength of the economic recovery.

In late trading, the benchmark 10-year Treasury fell 9/32 to 101 22/32, pushing its yield up to 3.42 percent from 3.39 percent. That yield is closely tied to consumer borrowing rates on loans such as mortgages.

Treasurys slid as investors flocked to the stock market after the Institute for Supply Management said manufacturing activity grew in October at the fastest pace since April 2006.

Investors also received news of an improvement in housing. The National Association of Realtors said pending home sales increased for the eighth straight month in September, and the Commerce Department said construction spending increased in September.

Treasury prices usually move in the opposite direction of stocks as traders swap the safety of government debt for more risky investments. The Dow Jones industrial average rose 77 points after a 250-point loss on Friday.

In other trading, the 30-year bond fell 18/32 to 103 31/32. Its yield rose to 4.26 percent from 4.23 percent.

The two-year note fell 2/32 to 100 4/32, pushing its yield up to 0.93 percent from 0.89 percent.

The yield on the three-month T-bill rose to 0.05 percent from 0.04 percent. Its discount rate stood at 0.06 percent.

The cost of borrowing between banks was unchanged. The British Bankers’ Association said the rate on three-month loans in dollars — the London Interbank Offered Rate, or Libor — remained steady at 0.28 percent.