The benchmark U.S. 10-year Treasury yield rose for a second consecutive day on Tuesday as concerns over the newly discovered Omicron COVID-19 variant continued to wane and boosted risk appetite. British drugmaker GSK (GSK.L) said on Tuesday its antibody-based COVID-19 therapy with U.S. partner Vir Biotechnology (VIR.O) is effective against all mutations of the variant, citing new data from early-stage studies. read more The announcement came after comments over the weekend from a health official in South Africa that Omicron cases in the country had shown only mild symptoms. Top U.S. infectious disease expert Dr. Anthony Fauci said on Tuesday that early evidence indicated that while the variant is likely more transmissible, it is also less severe. read more The yield on 10-year Treasury notes was up 4.8 basis points to 1.482%. The yield on the 10-year had its biggest weekly drop since June 2020 last week after comments from Federal Reserve Chair Jerome Powell took a more hawkish tone and concerns over the Omicron variant rattled markets. The central bank is scheduled to hold its final policy meeting of the year next week. "We had a bit of a knee-jerk reaction last week from the market about the Fed; really the market taking a couple of days to digest the idea that tapering is going to finish sooner and therefore the rate hikes are going to begin sooner," said Seema Shah, chief strategist at Principal Global Investors in London. "But as we start to see some of the challenges from Omicron hopefully lifting, as well as continued evidence the economy is pretty strong, then you should hopefully start to see some of that strength return to the market and that should see bond yield yields come up a bit from here." U.S. stocks were in rally mode, with the S&P 500 (.SPX) up about 2% and the Nasdaq up roughly 3%. read more Economic data showed U.S. unit labor costs surged more than initially thought in the third quarter, accelerating at a 9.6% annualized rate versus the initially reported 8.3%, indicating high inflation could remain for some time. In addition, the U.S trade deficit narrowed sharply, which could mean trade will contribute to economic growth this quarter for the first time in over a year. read more The 6-month bill"s yield climbed to 0.152%, its highest since July 16, 2020, as investors price in a rate hike from the Fed. Later in the week, investors will get a look at the November consumer price index to gauge inflationary pressures. The yield on the 30-year Treasury bond was up 4.4 basis points at 1.802%. An auction of $54 billion in 3-year notes by the Treasury was largely viewed as decent by analysts. Demand for the debt was average at 2.43 times the notes on sale. Auctions later in the week include $36 billion in 10-year notes on Wednesday and $22 billion in 30-year bonds on Thursday. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at 79.1 basis points, after widening to 81 on Monday. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 5.4 basis points at 0.689%. The U.S. dollar 5 years forward inflation-linked swap , seen by some as a better gauge of inflation expectations due to possible distortions caused by the Fed"s quantitative easing, was last at 2.415%. Reporting by Chuck Mikolajczak; Editing by Dan Grebler Our Standards: The Thomson Reuters Trust Principles.