WASHINGTON (dpa-AFX) - After coming under pressure early in the session, treasuries regained some ground over the course of the trading day on Thursday.
Bond prices climbed well off their early lows but still ended the day in negative territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose 2.4 basis points to 4.569 percent after reaching a high of 4.596 percent.
The early weakness among treasuries may partly have reflected profit taking following the advance seen over the two previous sessions, which saw bond prices moved notably higher on weaker-than-expected inflation data.
A report released by the Labor Department showing first-time claims for U.S. unemployment benefits unexpectedly dipped to a two-month low last week may also have weighed on treasuries.
The Labor Department said initial jobless claims fell dipped to 208,000 in the week ended July 11th, a decrease of 8,000 from the previous week's revised level of 216,000.
Economists had expected jobless claims to rise to 220,000 from the 215,000 originally reported for the previous week.
With the unexpected decrease, jobless claims dropped to their lowest level since hitting 199,000 in the week ended May 2nd.
Meanwhile the Commerce Department released a separate report on Thursday showing a modest increase in U.S. retail sales in the month of June.
The Commerce Department said retail sales crept up by 0.2 percent in June after climbing by an upwardly revised 1.0 percent in May.
Economists had expected retail sales to rise by 0.3 percent compared to the 0.9 percent increase originally reported for the previous month.
The modest increase in retail sales came as sales by motor vehicle and parts dealers shot up by 1.9 percent in June after jumping by 1.1 percent in May.
Excluding sales by motor vehicle and parts dealers, retail sales dipped by 0.2 percent in June after leaping by 1.0 percent in May. Ex-auto sales were expected to edge down by 0.1 percent.
A steep drop in sales by gas stations weighed on ex-auto sales, with gas station sales plunging by 5.3 percent in June after surging by 2.6 percent in May amid a pullback in gasoline prices.
The report said retail sales excluding sales by both motor vehicles and parts dealers and gas stations rose by 0.4 percent in June after climbing by 0.8 percent in May.
'The strength in underlying retail sales in June, coupled with upward revisions to past months, leaves real consumer spending on track for a 2.5% annualized gain in Q2 after growth of 0.5% in Q1,' said Michael Pearce, Chief U.S. Economist at Oxford Economics.
'Elevated gas prices have taken a bite out of real incomes and may yet feed through to a moderation in spending growth,' he added. 'However, spending remains well supported by a stabilizing labor market and a powerful tailwind from rising financial wealth.'
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