AP Treasurys Up Sharply on Housing Concerns Tuesday July 10, 11:26 am ET Treasurys Up Sharply on Housing Market Concerns NEW YORK (AP) -- U.S. Treasury bond prices rose sharply on Tuesday as renewed fears about the health of the housing market and speculation about stronger demand for the securities from pension funds tipped off a buying spree. At 11 a.m. EDT, the 10-year Treasury note was up $5.63 per $1,000 in face value, or 18/32 point, from its level at 5 p.m. Monday. Its yield, which moves in the opposite direction, fell to 5.07 percent from 5.15 percent. The 30-year bond rose 1 4/32 point. Its yield fell to 5.16 percent from 5.24 percent. The 2-year note rose 4/32 point. Its yield fell to 4.90 percent from 4.95 percent. Yields on 3-month Treasury bills were 4.96 percent as the discount rate rose 0.02 percentage point to 4.82 percent. Bond prices and yields move inversely. Part of the buying impetus came from dire reports from homebuilder D.R. Horton and Home Depot. D.R. Horton, the nation's largest homebuilder, warned of a third-quarter loss due to a 40 percent dive in orders for new homes. The announcement coincided with Home Depot lowering its earnings projection for this year by 15 percent, citing weaker conditions in the housing market. Investors, fearing this could mark a watershed in the deterioration of the U.S. housing market, bought into government paper. "It's just more of the same in the housing market, which is giving a bid to the (shorter maturities)," said Richard Gilhooly, senior fixed-income strategist at BNP Paribas. "But I don't think the Fed will listen to those concerns as long as they're dealing with inflation." Federal Reserve Chairman Ben Bernanke is set to speak about inflation at the National Bureau of Economic Research at 1 p.m. EDT. However, investors are preoccupied with broader issues, with many focused on some disturbing signals from the credit market. Ratings agency Standard & Poor's weighed in with what could be a heavy blow for structured credit and derivatives investors, placing 612 subprime mortgage-backed securities on watch for downgrade. Though the move isn't unexpected, it won't help mounting anxiety over falling valuations. Nerves are frayed particularly among the hedge fund community, which has been under a cloud in the weeks since Bear Stearns announced two of its hedge funds most active in the subprime mortgages market were in trouble. This raised the suspicion that more of these lightly-regulated vehicles are in distress, and failures will start to come to light. Also giving Treasurys a boost in early trade was chatter that the recent improvement in government finances could start to impact more markedly on its borrowing plans. Talk also focused on a possible trend of pension funds shifting their investment to favor bonds over equities.