TREASURIES-Bonds rise for 4th straight session on Fed outlook
* Durable goods, new homes data add to economic uncertainty
* Analysts see bond prices gain further, yields under pressure
* Treasury sells $35-billion in five-year notes
NEW YORK, Sept 25 (Reuters) - U.S. Treasury debt prices rose on Wednesday for the fourth straight session after data on housing and durable goods orders supported the outlook for accommodative monetary policy from the Federal Reserve.
Weakness in stocks, on concerns about the lack of progress in Washington over budget issues and a drop in Wal-Mart shares, also lifted safe-haven government debt prices.
Orders for long-lasting U.S. manufactured goods barely grew in August, while sales of new U.S. homes were near their lowest level of the year, data showed on Thursday, underscoring an uncertain outlook for the economy.
The bond market has been on a bullish run since the Fed decided last week to maintain its $85-billion-a-month bond buying and said it wanted to see more confidence in the sustainability of the economic recovery. Fewer asset purchases would hurt bond prices and drive yields higher.
"The Fed is really looking forward in terms of what could drive the economy in 2014 rather than just looking at current statistics," said Jim Vogel, an interest rate strategist at FTN Financial in Memphis, Tennessee.
"Even if we get a series of good reports on the economy, we don't see 10-year yields going back up to the 2.80s."
Benchmark 10-year notes rose 10/32 in price, their yields easing to 2.622 percent from 2.66 percent late on Tuesday. Thirty-year bonds rose 11/32, their yields easing to 3.65 percent from 3.68 percent late on Tuesday.
Durable goods orders rose just 0.1 percent in August after plummeting 8.1 percent in July. Orders for non-defense capital goods excluding aircraft, seen as a proxy for business spending, rose 1.3 percent after falling 1.4 percent in July.
Separate data showed new home sales rose in August, but not nearly as much as they fell in July.
Wilmer Stith, co-manager of the Wilmington Broad Market Bond Fund, said none of the data would move the Fed's hand closer to trimming its large-scale purchases of Treasuries and mortgage-backed securities.
"A pick-up in monthly payroll job growth and other economic metrics is needed just to counterbalance the financial chokehold of higher interest rates," Stith said. "That's the biggest reason Treasuries prices have been rising in recent days and will continue to do so."
In the next few trading sessions, Treasuries could also get support from buying by portfolio managers - who need to extend the maturities of their portfolios to match key benchmarks by month- and quarter-end, analysts said.
Hedging before some major corporate issuance could account for small price moves in the Treasury market as the hedges are placed ahead of the deals and lifted afterwards.
"Given the relatively thin market and light volume conditions, the potential is for a further pullback as portfolio types switch out of seasoned holdings to make room for these new deals," said Kenneth Logan, rates analyst at IFR, a Thomson Reuters unit.
In Washington, U.S. Treasury Secretary Jack Lew warned Congress that the United States would exhaust its borrowing capacity by Oct. 17, raising the threat of default by the United States.
Separately, as part of its ongoing efforts to foster economic activity and lower unemployment, the New York Fed purchased $3.158 billion in Treasury coupons on Wednesday with maturities ranging from November 15, 2020 through August 15, 2023.
The Treasury sold $35 billion in five-year notes with a high yield of 1.436 percent.