March 13 (Bloomberg) -- Treasuries fell after the U.S. sold $63 billion in notes and bonds this week and stocks rose on speculation the worst of the banking crisis may be over.

The yield on the 30-year Treasury bond gained 11 basis points this week while the Standard and Poor’s 500 Index rose the most since November. China’s Premier Wen Jiabao said today he’s concerned about the safety of U.S. debt.

“As people look at equities and corporate bonds, they are saying that they maybe don’t need to have that kind of money in Treasuries,” said Andrew Brenner, co-head of structured product in New York at MF Global Ltd. “The comments from the Chinese premier let people know that the largest holder of Treasuries is concerned about adding to it.”

The 30-year note yield rose seven basis points, or 0.07 percentage point, to 3.68 percent at 5:35 p.m. in New York, according to BGCantor Market Data. The 3.50 percent security maturing in February 2019 fell 1 6/32, or $11.88 per $1,000 face amount, to 96 26/32.

Treasuries handed investors a loss of 2.9 percent in 2009, according to Merrill Lynch & Co.’s U.S. Treasury Master Index.

The Standard & Poor’s 500 Index rose 0.7 percent. Financial shares in the S&P 500 soared 32 percent this week as Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. said they were profitable in the first two months of the year.

Wen ‘Worried’

The Obama administration sought to ease Wen’s concern about U.S. government debt, reiterating pledges to cut the budget deficit in half in four years.

“There’s no safer investment in the world than in the United States,” White House Press Secretary Robert Gibbs said today.

Wen earlier said he is “worried” about his country’s holdings of U.S. government debt. China held $696 billion of U.S. government securities at the end of last year, 46 percent more than 12 months earlier.

“I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets,” he said at a press briefing in Beijing.

The Federal Reserve Open Market Committee is scheduled to announce its interest-rate decision March 18. Fed fund futures show an 81 percent chance that the central bank will leave borrowing costs unchanged at a rate of zero 0.25 percent.

Forceful Measures

Traders are speculating the Fed may buy longer-term Treasuries to help lower yields and consumer borrowing costs, a possibility central bank chairman Ben S. Bernanke first discussed on Dec. 1. On March 5 the Bank of England said it would buy sovereign and corporate debt as part of so-called “quantitative easing.”

“Mr. Bernanke said he is going to take forceful measures,” said investor Jim Rogers, the chairman of Singapore-based Rogers Holdings, on March 9. Rogers predicted Fed purchases will postpone a rout in U.S. government securities.

The Treasury will announce on March 19 the amounts of 2-, 5-, and 7-year notes it will auction the following week.

The U.S. sold a record $34 billion of three-year notes, $18 billion in 10-year notes, and $11 billion in 30-year bonds this week as President Barack Obama’s administration funds a $787 billion economic stimulus package and services a budget deficit that may reach an all-time high of $1.75 trillion.

The 30-year bond auction yielded 3.64 percent, the highest level at a sale of the maturity in four months, lower than the 3.688 percent yield traders anticipated in a Bloomberg News survey before the sale. The so-called bid-to-cover ratio, which gauges demand by comparing the number of bids to the amount of securities sold, was 2.40, indicating stronger demand.

Impossible to Predict

“It is a positive sign for Treasuries that we had so much supply this week and it went well,” said Nils Overdahl, a bond- fund manager at New Century in Bethesda, Maryland, which oversees $500 million. “It speaks volumes about the market’s ability to absorb the supply.”

Goldman Sachs Group Inc. estimates the nation will almost triple debt sales this year to a record $2.5 trillion.

Industrial production in the world’s largest economy probably fell 1.3 percent last month, the Fed may report March 16, according to the median estimate in a Bloomberg survey. It dropped 1.8 percent in January.

“The economy is weak,” said John Canavan, a fixed-income strategist at Stone & McCarthy Research Associates in Princeton, New Jersey. “The market is already well braced for weakness, so if we get stronger-than-expected data, it’s liable to sell off more harshly.”

White House National Economic Council Director Lawrence Summers said that while it’s impossible to predict when the financial crisis will end, he sees signs that consumer spending has stabilized.

‘Boldest Economic Program’

“The Obama administration is embarking on what I believe is the boldest economic program to promote recovery and expansion in two generations,” Summers said in a speech today at the Brookings Institution in Washington. “No one can know just when its positive effects will be fully felt.”

Money-market rates show short-term borrowing costs are still increasing as banks hoard cash after almost $1.2 trillion of writedowns and losses since the start of 2007.

The difference between what banks and the Treasury pay to borrow for three months, the so-called TED spread, rose to 113 basis points, near the widest level since Jan. 9. The spread averaged 27 basis points from 2002 through 2006.

The London interbank offered rate, or Libor, that banks say they charge each other for three-month loans in dollars is 1.32, near the highest since Jan. 8, and up from this year’s low of 1.08 percent on Jan. 14. The Libor-OIS spread, a measure of bank reluctance to lend, is near its widest since Jan. 9.

To contact the reporter on this story: Susanne Walker in New York at +1-212-617-1719 or swalker33@bloomberg.net.

Last Updated: March 13, 2009 18:06 EDT