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Treasuries Move To The Downside Amid Upbeat Earnings News

After ending the previous session roughly flat, treasuries showed a notable move to the downside over the course of the trading day on Tuesday.

Bond prices drifted lower as the day progressed before closing firmly in negative territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed by 3.9 basis points to a nearly one-month high of 2.592 percent.

The weakness among treasuries came as the first batch of corporate earnings news has been largely upbeat, easing concerns about a potential first quarter contraction.

Before the start of trading on Wall Street, Dow components UnitedHealth (UNH) and Johnson & Johnson (JNJ) both reported better than expected quarterly results and raised their full-year guidance.

The positive corporate news overshadowed a Federal Reserve report showing industrial production unexpectedly edged lower in the month of March.

The report said industrial production dipped by 0.1 percent in March after inching up by 0.1 percent in February. Economists had expected production to rise by 0.2 percent.

Paul Ashworth, Chief U.S. Economist at Capital Economics, noted the dip in industrial production in March completed a "weak first quarter in which industrial production contracted by 0.3% annualized, as the U.S. factory sector succumbed to the global manufacturing malaise."

Meanwhile, a separate report from the National Association of Home Builders showed a modest improvement in U.S. homebuilder confidence in the month of April.

The report said the NAHB/Wells Fargo Housing Market Index inched up to 63 in April after holding at 62 in March, with the uptick matching expectations.

"Builders report solid demand for new single-family homes but they are also grappling with affordability concerns stemming from a chronic shortage of construction workers and buildable lots," said NAHB Chairman Greg Ugalde.

Earnings news may continue to impact trading on Wednesday along with a report on the U.S. trade deficit and the Fed's Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.

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