Treasuries decline as stocks rally

Treasuries fell the most in two weeks as Asian stocks rallied and the United States government prepared a record $34 billion note sale to help pay for its $700 billion bank-rescue plan.

The US needs to borrow "enormous" amounts, according to economic advisory firm Wrightson ICAP LLC, as it tries to halt a financial crisis that has wiped out more than $10 trillion of stock-market value worldwide this month. The Treasury plans to follow yesterday's two-year sale with a $24 billion five-year auction on Oct 30, the biggest since 2003.

"This will be a tough auction," said Yasutoshi Nagai, chief economist at Daiwa Securities SMBC Co in Tokyo, part of Japan's second-largest brokerage. "Supply is rising. There are few people who want to buy."