WASHINGTON (dpa-AFX) - After ending the previous session nearly flat, treasuries once again showed a lack of direction over the course of the trading day on Thursday.
Bond prices pulled back after an early move to the upside before rebounding in afternoon trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1 basis point to 1.554 percent.
The modestly higher close by treasuries came following reports President Joe Biden plans to propose nearly doubling the capital gains tax rate for wealthy individuals to fund spending on child care and education.
According to media outlets including Bloomberg News and the New York Times, Biden's so-called 'American Families Plan' would raise the capital gains rate for those earning $1 million or more to 39.6 percent from 20 percent.
The reports contributed to a steep drop by stocks on Wall Street, inspiring some traders to flee to relative safety of bonds.
Earlier in the day, traders were reacting to a Labor Department report unexpectedly showing a continued decline in initial jobless claims in the week ended April 17.
The report said initial jobless claims fell to 547,000, a decrease of 39,000 from the previous week's revised level of 586,000.
The continued drop came as a surprise to economists, who had expected jobless claims to rebound to 617,000 from the 576,000 originally reported for the previous month.
With the unexpected decrease, jobless claims slid to their lowest level since hitting 256,000 in the week ended March 14, 2020.
Meanwhile, the National Association of Realtors released a report showing another steep drop in U.S. existing home sales in the month of March.
NAR said existing home sales tumbled by 3.7 percent to an annual rate of 6.01 million in March after plunging by 6.3 percent to a revised rate of 6.24 million in February.
Economists had expected existing home sales to dip by 0.5 percent to a rate of 6.19 million from the 6.22 million originally reported for the previous month.
On Friday, the Commerce Department is scheduled to release a separate report on new home sales in the month of March.
Economists expect new home sales to spike by 14.3 percent to an annual rate of 886,000 in March after plummeting by 18.2 percent to a rate of 775,000 in February.
Copyright RTT News/dpa-AFX