Treasuries fell, with the gap in yields between 2- and 30-year securities reaching the widest margin since at least 1980 after a $13 billion offering of 30-year bonds drew lower-than-forecast demand. The yield curve touched 372 basis points, the most in at least 29 years, as the bonds drew a yield of 4.52%.

"It's an indication of what's to come in 2010," said William Larkin, a fixed-income portfolio manager in Salem, Mass., at Cabot Money Management, which manages $500 million. "We expect a gradual uptick to higher yields."

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