* Planned US business spending flat in September
* Stronger than expected UK growth supports risk-on trade
* Benchmark yields trade near the 200-day moving average
NEW YORK, Oct 25 (Reuters) - U.S. Treasuries eased in price for a second day on Thursday before an auction of seven-year notes and a day after the Federal Reserve stuck to its monetary policy, prompting some investors to book profits. Losses were pared late Thursday morning, however, as stocks pulled back from gains and added to the safe-haven allure of lower-risk U.S. government debt. Investor tolerance for risk had already been dented in the morning by durable goods orders data showing planned U.S. business spending was flat in September, which left some economists considering whether to lower expectations for third quarter economic growth. The government will release its advance estimate of third-quarter gross domestic product on Friday. ``The equipment and inventory data in the durables report were weaker than expected, and this put a modest downside spin in the risks for tomorrow's Q3 GDP report,'' said Michael Englund, chief economist at Action Economics in Boulder Colorado. Englund estimates U.S. third quarter growth at 1.5 percent, up marginally from a 1.3 percent annual rate in the second quarter. Treasuries began the day sharply lower, extending Wednesday's price weakness with a rise in the appetite for riskier assets following data showing third-quarter growth in the United Kingdom beat forecasts. On Wednesday the Fed, as expected, held off taking any further monetary policy-easing steps after it launched a new round of bond purchases last month. ``The heavy market tone started post-Federal Open Market Committee yesterday and would continue throughout the overnight session, with the selling escalating after the much stronger UK GDP report,'' said Justin Lederer, interest rate strategist at Cantor Fitzgerald in New York. Investors took the opportunity on Thursday to push Treasury prices lower to make way on their books for $29 billion of seven-year notes to be sold later in the day. The auction follows sales of $35 billion of two-year notes on Tuesday and $35 billion of five-year notes on Wednesday. Ahead of Thursday's sale, seven-year notes on the when-issued market were trading with a yield near 1.25 percent, compared with seven-year yields on the open market near 1.23 percent. Benchmark 10-year notes were trading 5/32 lower in price to yield 1.81 percent, up from 1.79 percent late Wednesday and very near the 200-day moving average. Benchmark yields reached as high as 1.86 percent in the overnight session, marking the loftiest since Sept. 17. Yields have generally been trading in a range of 1.55 percent to 1.87 percent since early August, notes Michael Cloherty, head of U.S. rates strategy at RBC Capital Markets in New York, adding pending October jobs data and the U.S. presidential elections in early November could push yields out of that band. ``The potential sell-off due to the election seems much larger than the potential rally. Accordingly, we expect to see pressure on the market before the election that could take 10 year yields out of their recent range,'' Cloherty said. The government will release October non-farm payrolls data on Nov. 2 and the U.S. elections are on Nov. 6.