U.S. Treasuries eased on Thursday, after data on new housing sales came in just short of expectations and added little to existing chances of a modest Federal Reserve interest rate cut next week.

Sales of new single-family homes rose 4.8 percent in September to an annual rate of 770,000 units, but this figure was lower than expected. Downward revisions also meant the previous month's total was less than originally estimated.

People are expecting continued bad news, so it looks like it did not get any worse; however, a single data point does not reverse a trend, said Brett Hawkins, portfolio manager, at Thompson, Siegel and Walmsley in Richmond, Virginia.

From our standpoint we expect disappointing home sales for most of the next 18 months, he added.

Nevertheless, Treasuries had difficulty extending their recent rally since stocks moved higher and the market has already factored in a bond-friendly rate cut of 25 basis points at the Fed's meeting next week.

Benchmark 10-year notes were down 5/32 on the day, yielding 4.37 percent. Two-year notes were also down 1/32 with a yield of 3.76 percent.

(Additional reporting by Burton Frierson)