Investors fled to the relative safety of U.S. government bonds Friday after concerns about Spain's financial problems flared up again.

The price of the benchmark 10-year Treasury note rose 46.8 cents for every $100 invested. The yield fell to 1.46 percent, from 1.51 percent late Thursday.

The price of the 30-year Treasury bond rose $1.50 for every $100 invested. The yield fell to 2.55 percent, from 2.61 percent late Thursday.

Earlier Friday, Spain's main IBEX stock index plunged almost 6 per cent and its borrowing costs soared. Interest rates on the country's 10-year bond rose 0.25 percentage point to 7.2 percent. Other troubled European countries - Portugal, Ireland and Greece - asked for a bailout when the interest on their benchmark bonds rose over 7 percent.

Treasury Minister Cristobal Montoro on Friday forecast Spain's recession will drag on into 2013.

Also Friday, the region of Valencia became the first to tap a fund designed to help out Spain's 17 semi-autonomous regions. Many Spanish regions are so heavily in debt - due to overspending and the burst real estate bubble - that they cannot raise money at affordable rates. As a result, they are struggling to repay creditors and settle contract bills.

As the euro zone's fourth-biggest economy, people fear that if Spain asked for a bailout, the rest of the region would not be able to afford the bill.

In other trading in the U.S., the yield on the two-year Treasury note fell to 0.21 percent, from 0.22 percent and the yield on the three-month T-bill rose to 0.09, from 0.08 percent Thursday.