TREASURIES-U.S. prices down on jobs data as stocks climb further
* U.S. private sector adds 198,000 jobs in February
* 10-year yields at highest in more than a week
* U.S. non-farm payroll data due on Friday
NEW YORK, March 6 (Reuters) - U.S. Treasuries prices dropped for a third straight session on Wednesday as better-than-expected jobs data prompted investors to drive equities to an all-time high. But a drop in new orders for factory goods underscored the still-modest pace of recovery in the world's largest economy. Treasuries have slid as investors, expecting low interest rates for years to come, have sought returns in riskier assets such as stocks, boosting the Dow Jones Industrial Average on Tuesday to an all-time high. That index rose again on Wednesday, surpassing the previous session's record. Stronger-than-expected U.S. jobs figures further dented the allure of Treasuries. U.S. private employers added 198,000 jobs in February, another sign of improvement in the labor market, a report by a payrolls processor showed on Wednesday.
"I would not say we're headed toward a robust pace anytime soon, but I do think it's encouraging that the economy seems to be gathering a little more steam," said Russell T. Price, senior economist with Ameriprise Financial Services Inc in Troy, Michigan. In addition, new orders for U.S. factory goods fell in January as demand for transportation equipment weakened, but the underlying strength in manufacturing remained intact.
Benchmark 10-year Treasury notes fell 9/32 in price to yield 1.927 percent, up from 1.8978 percent on Tuesday and touching a better than one-week high. Prices for 30-year bonds slipped 18/32 to yield 3.136 percent, up from 3.1064 percent late Tuesday. Wednesday's data are a sort of preview for more labor data this week: jobless claims on Thursday and key nonfarm payrolls on Friday.
Friday's number is particularly important because Federal Reserve policymakers want the U.S. jobless rate to fall from its current 7.9 percent closer to 6.5 percent. Analysts in a Reuters poll see the unemployment rate unchanged in February. Stephen Stanley, chief economist with Pierpont Securities in Stamford, Connecticut, said that what Fed Chairman Ben Bernanke and vice-chair Janet Yellen have said about asset purchases, "have pushed the timetable out." Stanley said he expects the U.S. central bank's unconventional monetary policy, known as quantitative easing, to end early next year. The Fed's support has helped fuel the recent stock rally, with the bank buying $85 billion per month of mortgage-backed securities and Treasuries through the year.