By Sam Goldfarb 

U.S. government bonds strengthened Tuesday, pushing yields toward the bottom of their recent range and highlighting a search for safer assets amid worries about a deadly virus outbreak in China.

In recent trading, the yield on the benchmark 10-year U.S. Treasury note was 1.769%, according to Tradeweb, compared with 1.834% Friday.

Yields, which fall when bond prices rise, slid overnight along with global stocks after a leading Chinese health official said a newly identified virus that originated in central China had spread between humans. That sparked memories of the 2002 outbreak of SARS, a similar coronavirus that killed 774 people and slowed the Chinese economy.

As investors rushed into U.S. Treasurys, the yield on the 10-year note at one point dropped as low as 1.767%, the lowest intraday level since Jan. 6 and roughly the bottom of a range that has held since early December.

Investors view Treasurys as one of the safest assets in the world because they offer a steady stream of income with essentially no risk of default.

Some analysts said Treasurys had been primed to rally because they had been holding steady in recent weeks even as investors piled into riskier assets, sending stocks to new records.

"You're definitely getting the bid here in rates," said Justin Lederer, senior trader of interest rates at Cantor Fitzgerald LP. "It's been impressive that even with the more risk-on events...you really haven't been able to push rates significantly higher."

Despite progress in U.S.-China trade relations and easing recession fears, analysts say demand for Treasurys has been supported by persistently soft inflation and signals from the Federal Reserve that it is no rush to either raise or lower short-term interest rates.

Inflation is a main threat to longer-term bonds because it erodes the purchasing power of their fixed payments.

Write to Sam Goldfarb at sam.goldfarb@wsj.com

(END) Dow Jones Newswires

January 21, 2020 11:55 ET (16:55 GMT)

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