* Growth, Greece worries stoke safety bids for bonds
* U.S. to sell $32 bln in 3-year note supply
* Fed buys $1.89 billion in long-dated debt
* Long bond yield dips below 200-day moving average
(Updates market action, adds quote)
By Richard Leong
NEW YORK, Oct 9 (Reuters) - U.S. Treasuries prices rose onTuesday in advance of a three-year debt sale as safe-haven bidsfor bonds emerged on anxiety about weak global growth andGreece's ability to meet the terms of a bailout.
Those concerns overshadowed a government report on Fridaythat showed the U.S. jobless rate fell in September to 7.8percent, its lowest since January 2009. This and othersurprisingly upbeat aspects of the September payroll data led toa sell-off in Treasuries and pushed benchmark yields to theirhighest levels in about two weeks.
Worries about anemic economic and profit growth ledinvestors o n T uesday to pare their holdings in stocks and otherrisky assets and to raise their positions in less-riskyTreasuries.
The U.S. bond market was closed on Monday due to theColumbus Day holiday.
The International Monetary Fund, one of Greece's mainlenders, said in a report o n T uesday that Athens would miss thefive-year debt reduction target that is one of the conditionsfor the country's 130 billion euro bailout.
The group also warned that the United States faces meagergrowth of about 2.0 percent this year and in 2013 and predicteda 0.4 percent contraction in the euro zone's economy this year.It also downgraded its outlook on China, the world's second-largest economy.
The IMF outlook "was adding to the downbeat sentiment. Itwas a confirmation of slow growth globally," said GennadiyGoldberg, an interest rate strategist with TD Securities in NewYork. "That's why we are setting back into this trading range."
Graphic:Euro debt crisis
German Chancellor Angela Merkel said during a visit toGreece on Tuesday that Athens is making progress with fiscalreforms. Her visit coincided with protests against steepspending cuts in various government programs.
Safe-haven appetite for Treasuries was mitigated by someselling by bond dealers in anticipation of this week's $66billion in coupon supply.
The Treasury Department will sell $32 billion in three-yearnotes at 1 p.m. (1700 GMT). It will sell $21 billion in 10-yeardebt on Wednesday and $13 billion in 30-year bonds on Thursday.
Traders expected the upcoming three-year note
to sell at a yield of 0.349 percent, compared with 0.337 percentat last month's auction.
Also on the supply front, the Federal Reserve resumed itsOperation Twist, which involves the selling of shorter-datedTreasuries and purchases of longer-dated issues in a bid to holddown long-term borrowing costs and to help the economy. Itbought $1.889 billion in Treasuries due in Feb 2036 to Aug 2042.
Fed Vice Chairwoman Janet Yellen was scheduled to speak at8:30 p.m. (0030 GMT) about sovereign risk and financial marketsat an event sponsored by the IMF and the Japanese ministry offinance.
"The market is struggling with a lot of moving parts," saidRobert Tipp, chief investment strategist with Prudential FixedIncome in Newark, New Jersey. "At the end of the day, we'll bein a pretty tight trading range."
On the open market, benchmark 10-year notes
up 11/32 in price to yield 1.703 percent, down 4 basis pointsfrom late on Fr iday when it touched 1.748 percent, the highestsince Sept 24.
rose 24/32 in price to yield2.930 percent, down 4 basis points from Friday's close. The30-year yield slipped below its 200-day moving average of 2.939percent, according to Reuters data.
Wall Street stocks fell, with the Standard & Poor's 500index
down 0.7 percent. Traders will focus on theearnings of Dow component Alcoa
after the market close.Analysts expect the aluminum producer likely broke even in thethird quarter.
(Editing by Dan Grebler)
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((-------MARKET SNAPSHOT AT 11:15 a.m. EDT (1515 GMT)-------Dec T-Bond148-07/32 (-01/32)Dec 10-Year note133-05/32 (-04/32)Change vs CurrentNyk yieldThree-month bills0.1025 (+0.00) 0.104Six-month bills0.14 (+0.00) 0.142Two-year note99-31/32 (+) 0.262Five-year note99-27/32 (+03/32) 0.65510-year note99-10/32 (+09/32) 1.70330-year bond96-14/32 (+25/32) 2.931DOLLAR SWAP SPREADSLAST ChangeU.S. 2-year dollar swap spread 12.25 (-1.50)U.S. 3-year dollar swap spread 11.75 (-1.50)U.S. 5-year dollar swap spread 13.50 (-0.50)U.S. 10-year dollar swap spread 5.75 (-0.50)
U.S. 30-year dollar swap spread -22.00 (-0.75)))
Keywords: MARKETS USA BONDS/