"Treasury prices rallied Friday and the market posted a weekly gain, as investors dumped stocks and commodities and sought safety in low-risk government debt amid worries about the unfolding debt problems in Dubai.
The safe-haven flows added to demand for Treasurys .... Investors at home and abroad snapped up this week's record $118 billion in sales of two-year, five-year and seven-year note supply, allowing the U.S. government to easily fund its budget shortfalls.
Friday, the 10-year Treasury note was up 21/32 point, or $6.5625 for every $1,000 invested, to yield 3.202%, down from 3.279% Wednesday as bond yields fall when prices rise.
The two-year note, a haven in times of uncertainty, was up 4/32 point to yield 0.687%. It touched an overnight low of 0.609%, close to the record low of 0.601% set on Dec. 17, 2008.
In the scramble for safety, rates on four Treasury bills maturing in January 2010 traded around negative 0.01% Friday, dipping below zero for the second time since last week. That means investors were willing to forgo the chance of earning interest and take a small loss instead to get their hands on bills—government securities of less than a year's maturity that are sold at a discount. These are typically seen as the safest types of securities."
