Treasury prices rise on European debt concerns

NEW YORK — Treasury prices rose Wednesday, sending their yields lower, after a downgrade of Portugal's debt sent investors looking for safer places to put their money.

Moody's lowered Portugal's debt to junk status late Tuesday. The ratings service cited concerns about the country's ability to meet targets to lower its deficit. Many traders are worried about the stability of the European financial system.

"You're continuing to see rising anxiety," driving investors into Treasurys, said Robert Tipp, chief investment strategist for Prudential Fixed Income.

In the U.S., a private research firm reported that growth slowed at service companies like banks and health care providers in June. That also pushed bond prices higher. The service industry accounts for the majority of the U.S. economy.

A more important report will come on Friday when the government releases the unemployment rate for June and the number of jobs created during the month.

Bond investors want to see signs that jobs are recovering and the economy is strengthening, said Joe Kinahan, chief derivatives strategist at TD Ameritrade. "Everybody is watching the unemployment number," he said. That figure, he said, is "the lynchpin number for the rest of the economy."

The price of the 10-year note rose 25 cents for every $100 invested. Its yield fell to 3.10 percent from 3.12 percent late Tuesday. Bond yields fall when their prices rise.

The price on the 30-year Treasury bond rose 31.25 cents, sending its yield down to 4.35 from 4.38 percent. The yield on the two-year bond fell to 0.42 percent from 0.43 percent.