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Treasury bond prices rebounded smartly Friday from early losses prompted by a report of surprising economic growth, news that aroused concerns that the Federal Reserve won't cut interest rates next month.

The price of the Treasury's main 30-year bond, down 5/8 point in early trading, closed up 19/32 point, or $5.94 per $1,000 in face value. Its yield, which moves inversely from price, dropped to 6.35 percent from 6.40 percent late Thursday.The Commerce Department reported that gross domestic product, the government's broadest gauge of the economy, surged 4.2 percent at an annual rate in the third quarter.

The surprisingly strong reading was the biggest jump in GDP since the 1994 fourth quarter. Analysts have been expecting the economy to rebound from a period of sluggish growth earlier in the year, but a surge this strong was unexpected and further dimmed hopes of an interest rate cut in November.

"It's a pretty hard blow," said John Fechter, head of government bond trading at A.G. Edwards & Sons Inc. in St. Louis.

The Fed lowered rates in July, reversing a yearlong course of higher rates designed to slow the economy down. With reports presenting a mixed picture of the economy, many investors have been waiting for the Fed to cut rates again. Lower rates on new securities enhance the value of bonds already in circulation.

Following the report, many traders set up bets known as "short sales" on the anticipation that bond prices would decline further.

Traders employing this strategy bought bonds, then sold them immediately in the market. They hoped to buy back bonds later in the day at lower prices to repay their loans.

Those hopes, however, were dashed after a West Coast money manager unexpectedly bought about $2 billion in bonds and sparked a rebound in the market, according to traders familiar with the purchases. The buyer was not identified.

As prices recovered, the short sellers were forced to buy bonds before prices went too high and repaying their loans became too expensive.

Trading volume ranging from light to moderate made the market particularly vulnerable to a sudden jolt by a large bond buyer, market participants said.

Investors are expected to sift through a raft of October reports next week for further clues on the economy and future interest rates, including consumer confidence on Tuesday, purchasing managers' outlook on Wednesday and national employment on Friday.

Elsewhere in the market, short-term Treasury securities rose 1/32 point to 1/16 point and intermediate maturities fell 1/16 point to 7/32 point, reported Dow Jones Telerate Inc., a financial information service.