TREASURIES-Bonds tumble on stock gains, weak auction

* Analysts say jobless claims point to labor improvement

* Stocks climb over 1 pct, eroding bonds’ safety appeal

* Demand at seven-year note sale lowest since March
(Rewrites first paragraph, updates market action after 7-year
auction)

By Chris Reese

NEW YORK, Nov 24 (BestGrowthStock) – The U.S. Treasuries market
stumbled on Wednesday as data that signaled improving labor
conditions boosted stocks and eroded the safe-haven appeal of
government debt.

Compounding the market selloff was weak bidding for $29
billion in seven-year notes, part of this week’s $99 billion in
coupon-bearing supply.

Traders more than took back Treasuries price gains made
Tuesday when renewed tensions on the Korean peninsula and
worries over fiscal troubles in Ireland and Portugal spurred
flight-to-safety buying.

Amid a raft of economic data, which overall painted a
relatively mixed picture of the state of the economy, the fall
in jobless claims stood out. The government said new U.S.
claims for unemployment dipped to the lowest in more than two
years last week.

“There is some weakness because we had that good initial
jobless claims number and it is countering that
flight-to-quality bid that Treasuries have enjoyed over the
last couple of days,” said David Coard, head of fixed-income
sales and trading at Williams Capital Group in New York.

U.S. benchmark 10-year Treasury notes (US10YT=RR: ) were
trading 30/32 lower in price to yield 2.89 percent, up from
2.78 percent late Tuesday. The note briefly traded a point
lower in price, with its yield dipping to 2.75 percent.

“A blizzard of data this morning ahead of the Thanksgiving
holiday, (but) one thing stands out — weekly jobless claims
are tumbling,” said Chris Rupkey, chief financial economist at
Bank of Tokyo-Mitsubishi UFJ in New York. “This is exactly what
it looks like when the labor market springs back to life after
the end of a recession.”

Within the selling, seven-year notes (US7YT=RR: ) were 23/32
lower in price to yield 2.20 percent, up from 2.08 percent late
Tuesday. “The street is beating (seven-year notes) up ahead of
the auction,” Williams’ Coard said.

Wednesday’s seven-year auction rounded out this week’s debt
sales. The overall bidding for the seven-year issue due Nov.
2017 was the lowest since March, while the yield cleared at a
level higher than traders had expected. For details, see
[ID:nTAR000039]

Apart from jobless claims, economic data was mixed.

Consumer spending rose for a fourth straight month in
October, while new orders for long-lasting U.S. manufactured
goods unexpectedly fell last month. Consumer sentiment picked
up more than expected in November, but new home sales
unexpectedly fell in October. [ID:nN24211131]

The focus on jobless claims helped to send Wall Street
stocks indexes more than 1 percent higher. [.N]

The U.S. bond market will shut on Thursday for the
Thanksgiving holiday and will reopen for abbreviated trading on
Friday.

Next price support for 10-year notes was seen in the 3.02
percent to 3.06 percent range, with price resistance at 2.73
percent, said William O’Donnell, head of U.S. Treasury strategy
at RBS Securities in Stamford, Connecticut.

The 30-year bond (US30YT=RR: ) slid 1-6/32 lower in price to
yield 4.27 percent, up from 4.19 percent late Tuesday.
(Additional reporting by Richard Leong; Editing by Kenneth
Barry)

TREASURIES-Bonds tumble on stock gains, weak auction