Treasurys slide on upbeat housing data

NEW YORK — Treasury prices fell Friday as the stock market held onto big gains from the week and as investors examined upbeat data on housing.

Demand for the safety of government debt ebbed after rising Thursday as the Dow Jones industrials and the Standard & Poor’s 500 index posted their best weekly performance since the week ending March 13, when the stock market’s spring surge began.

A better-than-expected report on the housing market also dampened demand for safe investments. The Commerce Department said construction of U.S. homes rose in June to the highest level in seven months. Builders are trying to complete homes before a November deadline that gives first-time buyers a special tax break.

Construction of homes and apartments jumped 3.6 percent in June, beating economists’ estimates. Building permits climbed 8.7 percent, also topping forecasts.

The yield on the benchmark 10-year Treasury note fell 23/32 to 95 21/32, pushing its yield up to 3.65 percent from 3.58 percent late Thursday.

Treasury prices tumbled earlier in the week as the stock market rallied and as two reports showed inflation was higher than analysts had forecast. Rising prices are bad for fixed-income investments because it erodes the value of their returns.

But prices rebounded some on Thursday as investors worried that commercial lender CIT Group Inc. could file for bankruptcy protection after negotiations with federal regulators about a possible rescue package fell through.

The 30-year bond fell 1 17/32 to 95 9/32 and its yield rose to 4.54 percent from 4.45 percent.

The two-year note fell 1/32 and its yield rose to 1 percent from 0.99 percent.

The yield on the three-month T-bill was unchanged at 0.16 percent. Its discount rate stood at 0.17 percent.