U.S. 2-Year Notes Sell at Record Low Yield; Bond Yields Rise

The Treasury sold $35 billion of two-year notes at a record low yield of 0.22 percent as investors continue to seek the world’s safest securities as a refuge from financial market turmoil and a slowing economy.

U.S. 30-year bonds dropped as stocks rose. Yields on Treasuries were at almost record lows amid speculation Federal Reserve Chairman Ben S. Bernanke may signal on Aug. 26 that policy makers are willing to take further measures to prevent the U.S. economy from returning to recession. The note auction was the first of the maturity to be sold after Standard & Poor’s on Aug. 5 downgraded the U.S. AAA long-term sovereign rating.