Treasurys move lower after positive economic data on manufacturing, construction, spending

Treasury prices ease on stronger economic reports

CHARLOTTE, N.C. — Interest rates rose in the bond market Monday after positive economic data and a deal to combine United and Continental Airlines raised expectations about the economy.

Stock prices rose after reports on improvements in manufacturing, construction and consumer spending and the airlines deal. The Dow Jones industrials rose 143 points. The stock rally reduced demand for safe investments like Treasurys.

The yield on the 10-year Treasury note rose to 3.69 percent in late trading Monday from 3.66 percent late Friday. Its price fell 28.125 cents to $99.4375. The yield on the 10-year note, which matures February 2020, is linked to rates on mortgages and other consumer loans.

A report from the Institute for Supply Management on Monday showed that the U.S. manufacturing industry expanded at the fastest pace in nearly six years. The trade group’s manufacturing index rose to 60.4 in April from 59.6 in March. Economists expected a reading of 60. Manufacturing has shown consistent signs of a rebound in recent months as production picks back up.

Another report from the Commerce Department said construction activity rose 0.2 percent in March, the first gain since October. Economists expected a drop.

The agency also reported that personal spending rose 0.6 percent in March, the biggest jump in five months. Consumer spending accounts for the bulk of economic activity in the country, so growth is a welcome sign of recovery.

In other trading, the yield on the 2-year note that matures in April 2012 rose to 1.01 percent from 0.97 percent, while its price fell 9.375 cents to $100.

The yield on the 5-year note that matures in April 2015 rose to 2.47 percent from 2.42 percent. Its price fell 21.875 cents to $100.15625.

The yield on the 30-year bond that matures in February 2040 rose to 4.53 percent from 4.52 percent. Its price fell 15.625 cents to $101.53125.

The yield on the three-month Treasury bill that matures August 5 was unchanged from 0.15 percent. Its discount rate was 0.16 percent.