NEW YORK —  Treasurys extended their rally into a second day Thursday, as the soaring price of oil and concerns about a resulting slowdown in consumer spending drove investors to the security of government issues.

"Right now it is all about safe haven bets," said Tom di Galoma, head of Treasurys trading at Jefferies & Co. "There's still fear in the market about a recession, and that's made stocks pretty soft this week."

The price of oil swept past $124 a barrel Thursday for the first time, and expectations are that oil will keep climbing. That has investors, particularly in the stock market, worried that consumers will be forced to curtail their spending on discretionary items, a trend that would likely stymie economic growth.

Such concerns have sent stock prices sharply lower this week, although equities managed a moderate rebound Thursday.

The nation's major retailers underscored the belief that consumers are anxious about spending, releasing April sales reports that showed Americans are being drawn to lower-priced retailers and that they're spending more on necessities than on apparel and other discretionary goods.

Meanwhile, the Labor Department said the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000, a larger decline than expected. The news had little impact on bond trading.

The benchmark 10-year Treasury rose 3 19/32 to 100 25/32 and yielded 3.79 percent, down from 3.85 percent late Wednesday, according to BGCantor Market Data. The big jump comes after the Treasury Department on Wednesday auctioned $15 billion of 10-year bonds, the biggest amount in four years.

The 2-year note added 5/32 to 99 26/32 and yielded 2.22 percent, down from 2.30 percent late Wednesday.

Higher oil prices raise the specter of accelerating inflation, which normal would send bonds falling because of the negative effect inflation has on fixed-income investments. But analysts said investors were more concerned about finding a safe haven than they were about higher prices eroding the value of their holdings.

The 30-year long bond rose 30/32 to 97 6/32 and yielded 4.55 percent, down from 4.61 percent late Wednesday. Demand increased in the long bond after the Treasury sold $6 billion of the maturity on Thursday afternoon.

Di Galoma said Treasurys have also moved higher because of tensions between Russia and Georgia. Georgian President Mikhail Saakashvili told Russian journalists on Thursday that both countries have come close to war in recent days and a threat of an armed conflict remains, according to several news reports.

"That's making people nervous, and the Treasury market has seen an uptick because of it," he said.

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