Treasurys rebounded Tuesday from a selloff a day earlier, after a huge drop in home prices and a sharp plunge in consumer confidence led investors to again seek out the safety of government bonds.Early Tuesday, the Standard & Poor's/Case-Shiller index of home prices sank 11.4 percent in January — the widest year-over-year drop since the indicator began in 1987. Then the Conference Board, a research group, gave the market more reason to worry when it said its index of consumer confidence fell in March to the lowest level in five years. With Americans wrestling with tumbling home prices, high energy and food prices, and a weakening job market, investors are growing more anxious about the economy and leaning toward less risky assets.



"The U.S. consumer is getting hit by a destruction of wealth in housing," said T.J. Marta, a fixed-income analyst at RBC Capital Markets. "They're getting chewed up by high energy and high food prices. And their earnings growth has peaked ... and it's going to soften. None of this paints a good picture for the consumer going forward."

The benchmark 10-year Treasury note rose 18/32 to 100 3/32, and yielded 3.49 percent, down from 3.55 percent late Monday, according to BGCantor Market Data. Prices and yields move in opposite directions.

The 2-year note rose 5/32 to 100 16/32, with a yield of 1.73 percent, down from 1.82 percent late Monday.

The 30-year long bond rose 1 to 101 3/32, with a yield of 4.31 percent, down from 4.37 percent.

The Federal Reserve has calmed some anxiety surrounding the financial industry in recent weeks by slashing interest rates, expanding lending efforts and supporting JPMorgan Chase & Co.'s buyout of Bear Stearns Cos. But those jitters haven't been quashed completely.

"Any belief that the Fed has provided some magic pill is severely misguided," Marta said. "You've got a credit implosion that's going to take months, if not quarters, if not years, to work itself out."

On Monday, Treasury prices dropped sharply as another big gain in stocks lured investors away from the safety of government bonds. JPMorgan Chase & Co.'s boosted buyout price for Bear Stearns Cos., as well as stronger-than-expected existing home sales, also drew money out of Treasurys and into stocks.

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