The 10-year note rose 05/32 to 97-18/32 for a yield of 4.56%, while the 30-year bond fell 08/32 to 108-25/32 for a yield of 4.78%.
Stock markets were taking hits, amid concerns about the U.S. economy and a Securities Exchange Commission investigation into the automaker giant General Motors.
News also hit that U.S. new home sales rose 2.1% to a 1.222 million pace in September, partially offsetting the 11.6% plunge in August to 1.197 million. The supply of homes held at a 4.9 month rate and the median price declined to $215,700 from $220,300. While the impact from hurricanes distorted the data, the dip in prices may suggest a slowdown in housing.
Initial jobless claims fell 28,000 to 328,000 in the week ended Oct. 22, from 356,000 the week earlier. The market consensus had been for a drop to 338,000. September durable goods orders fell 2.1% after rising 3.8% in August, which was revised from 3.4%. The market had expected a 1.0% drop.
Investors bet that the Fed will raise interest rates at next Tuesday's meeting. Investors continued watching Fed chairman nominee Ben Bernanke for more information about his inflation fighting credentials.