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Treasuries Close Moderately Lower After Late-Day Pullback

After showing a lack of direction throughout much of the session, treasuries came under pressure going into the close of trading on Monday.

Bond prices moved to the downside in late-day trading before closing moderately lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2 basis points to 2.252 percent.

The late-day pullback may have been partly due to profit taking after the ten-year yield hit a five-month intraday low in early trading.

Strength on Wall Street may also have weighed on treasuries, with stocks rebounding after the Dow and the S&P 500 ended last Thursday's trading at their lowest closing levels in two months.

Meanwhile, traders largely shrugged off ongoing geopolitical concerns as well as the release of a batch of disappointing U.S. economic data.

The National Association of Home Builders released a report showing a bigger than expected pullback in homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index dropped to 68 in April after jumping to 71 in March. Economists had expected the index to edge down to 70.

The bigger than expected decrease by the index came after it reached its highest level since June of 2005 in the previous month.

A separate report released by the New York Federal Reserve showed that the pace of growth in regional manufacturing activity slowed more than expected in April.

While the markets were closed on Friday, the Commerce Department released a report showing a modest drop in U.S. retail sales in the month of March.

The report said retail sales dipped by 0.2 percent in March after a revised 0.3 percent decline in February. Economists had expected sales to edge down by 0.1 percent compared to the 0.1 percent uptick originally reported for the previous month.

Excluding a notable decrease in auto sales, retail sales came in unchanged for the second consecutive month. Ex-auto sales had been expected to rise by 0.2 percent.

A separate report from the Labor Department showed an unexpected decrease in consumer prices in the month of March.

Trading on Tuesday may be impacted by reaction to reports on housing starts and industrial production as well as comments by Kansas City Federal Reserve President Esther George.

by RTTNews Staff Writer

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