One measure of the credit market's response was the price of the Treasury's bellwether long bonds, the 7 7/8 percent issue maturing in 2021.

The 7 1/8 percent issue maturing in 2010, which is noncallable for life, was priced at $100.

Still, the longest Treasury bonds, the benchmark 9 1/8 percent issue maturing in 2018, led the advance.

The 8.5 percent issue maturing in 2020 was auctioned on Thursday at an average yield of 8.5 percent.

In late trading, the Treasury's bellwether long bonds, the 8.75 percent issue maturing in 2020, were offered at 103 27/32, up 15/32 on the day.

One indication of the market's volatility was the price range of the Treasury's bellwether long bonds, the 8.5 percent issue maturing in 2020.

The Treasury's bellwether long bonds, the 8.75 percent issue maturing in 2020, were offered late in the day at 103 22/32, off 2/32.

For example, the Treasury's benchmark long bonds, the 8.75 percent issue maturing in 2020, were being offered at 100 29/32 at the close.

The maximum yield on the bonds offered was the 6.50 percent term issues maturing in 2017.

In late trading, the benchmark long bonds, the 8.5 percent issue maturing in 2020, were offered at 98 23/32, down 12/32 on the day.