Treasury Notes Decline on Concern Refuge Appeal May Be Waning

Treasury notes dropped as the $35 billion government auction of five-year debt drew lower demand than forecast, raising concern the refuge appeal of U.S. securities may be waning.

Benchmark 10-year securities rose earlier, pushing the yield to a three-week low on speculation a jump in crude oil prices over violent protests in Libya will slow the economic recovery. U.S. notes erased gains as the sale of five-year debt drew the lowest level of participation since November from a group of investors including foreign central banks.