Middle-maturity U.S Treasury debt prices gained on Wednesday, while the 30-year bond edged higher, following a strongly bid auction of five-year notes.

Traders hailed the sale of $37 billion of five-year notes as a success after the high yield in the auction was lower than the yield at which five-year notes were trading simultaneously in the open market. Prices of three-, five- and seven-year notes, located in the so-called belly of the curve, were higher following the auction.

The benchmark U.S. 10-year Treasury note was up 8/32, its yield at 3.02 percent. Earlier, the 10-year note had gained on news of a drop in U.S. durable goods orders in June and then pulled back to trade nearly flat just ahead of the five-year note auction.

The five-year note sale was the second of three note auctions scheduled this week totaling $104 billion.

"The market just sort of took today's data and said, 'You know what? There's still a huge demand for Treasuries; the economy's not as strong as we want it, I think we'll go ahead and buy these things,'" said Todd Colvin, vice president at MF Global in Chicago.

"The auction results came out — they were very strong," he added. "Demand remains very strong for U.S. debt."

The five-year note was last up 8/32 in price for a yield of 1.74 percent. Its auction yield was 1.796 percent.

"Strong bidding ... good coverage," said John Spinello, Treasury bond strategist at Jefferies & Co. in New York, in an e-mail message immediately after the 1 p.m. EDT auction.

Spinello cited technical resistance for the 10-year note in the area between 3.02 percent and 2.975 percent, and support back at 3.05 percent to 3.07 percent,

The seven-year note, which is to be auctioned on Thursday in a $29 billion sale, yielded 2.43 percent and showed a price gain of 11/32.

New orders for durable goods fell for a second straight month in June, posting their largest decline since August, according to a government report on Wednesday.

Analysts said the 1.0 percent drop in orders offered further evidence economic growth cooled in the second quarter.

Ward McCarthy, chief financial economist at Jefferies & Co. in New York, said the bond market liked the report, which echoed "the more cautious tone" evident in other data.