Treasury five-year notes fell as the government sold a record $28 billion sale of the securities, Bloomberg reported.
The so-called bid-to-cover ratio, a gauge of demand, was 2.06, compared with 2.44 at the last auction, on Nov. 25. The notes drew a yield of 1.539 percent, the lowest ever.
The five-year note yield rose three basis points, or 0.03 percentage point, to 1.45 percent at 1:07 p.m. in New York, according to BGCantor Market Data. The price of the 2 percent security due in November 2013 fell 5/32, or $1.56 per $1,000 face amount, to 102 19/32.
The Treasury last auctioned five-year debt on Nov. 25, selling $26 billion at a yield of 2.11 percent. Investors bid for 2.44 times the securities offered, compared with an average of 2.12 times at the previous 10 auctions.
A sale of $22 billion of four-week Treasury bills drew a yield of zero percent for the third straight week.
The government's record $38 billion auction of two-year notes yesterday drew a yield of 0.922 percent, about 10 basis points higher than the previously sold security. While that was the lowest on record since the U.S. began regular auctions of two-years in 1975, the average forecast in a Bloomberg survey of eight firms that bid on the sale was for a yield of 0.912 percent. Investors bid for 2.13 times the securities offered, compared with an average of 2.25 times at the previous six auctions.