TREASURIES-Yields fall as stocks gain, before 10-year note sale
* Prices gain as stocks slip
* Treasury to sell $21 bln in 10-year notes
* Fed to buy $1.25 bln-$1.75 bln bonds due 2036-2043
* Unlocking of hedges for Verizon bond deal helps Treasuries rally
NEW YORK, Sept 11 (Reuters) - U.S. Treasuries yields fell on Wednesday as stocks declined, and before the Treasury sells $21 billion in 10-year notes, the second sale in $65 billion worth of new supply this week. Bond prices gained without new economic catalysts, with yields holding in the recent range as many investors were reluctant to enter into new positions ahead of a highly anticipated Federal Reserve meeting next week. "I think everyone is trying to be a little bit neutral at this point, that's why the market is so whippy, I don't think anyone really wants to hold anything past the Fed meeting (on Sept. 17-18)," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. Benchmark 10-year notes were last up 9/32 in price to yield 2.94 percent, down from 2.97 percent late on Tuesday. They have fallen from a two-year high of 3.01 percent on Friday. The unwind of hedges set ahead of Verizon's record-breaking corporate bond deal may have helped Treasuries rally. Verizon launched a $49 billion sale on Wednesday, eclipsing the previous investment grade record of $17 billion by Apple in April, according to IFR, a Thomson Reuters service. Higher yields may help the Treasury sell $21 billion in a 10-year note reopening later on Wednesday, though nervousness over the Fed meeting could conversely hurt demand. The benchmark yields have increased from 1.60 percent at the beginning of May. "I think the higher yields will help international demand, the caution is whether we do we get a weaker auction because the Fed is coming out and nobody really wants to buy anything," Goldberg said. The Fed is expected to announce after its meeting that it will reduce its $85 billion-a-month bond purchases, though a weaker than expected employment report on Friday has reduced expectations of how large any cut will be. Economists told Reuters after the latest jobs report they now expect the Fed to begin paring its purchases of Treasuries and mortgage-backed securities by $10 billion a month, down from the $15 billion median in Friday's primary dealer poll and a wider poll in August. The Fed will buy between $1.25 billion and $1.75 billion in bonds due from 2036 to 2043 on Wednesday as part of its ongoing purchase program.