Treasuries fell sharply on Tuesday as investors sought out riskier investments following the announcement of capital raising plans by major banks UBS and Lehman Brothers.

Two year notes fell 13/32 in price to yield 1.802 percent at 4:47 p.m. in New York. Ten year notes were down 1 6/32 to yield 3.562.

Swiss bank UBS reported $19 billion in write-downs for debt securities. The bank said it would raise 15 billion francs ($15.07 billion) through a rights offering.

Yesterday, U.S. investment bank Lehman brothers also announced a plan to raise $4 billion through a share offering, raising the offer from $3 billion announced yesterday.

Meanwhile, a closely watched manufacturing index smaller showed smaller than expected contraction for the sector in March. The Institute for Supply Management's factory index was up to 48.6 from 48.3 in February. Readings under 50 indicate contraction. A median reading of economists polled by Bloomberg News showed expectations of 47.5.