OUTLOOK-U.S. Treasuries fall as Greek deal damps demand for safety

* Greece signs austerity package to get new bailout
* New U.S. jobless claims fall in latest week
* U.S. 30-yr bonds sold in last auction of the week
* Fed bought $4.35 billion in longer-dated debt

By By Ellen Freilich
NEW YORK, Feb 9 (Reuters) - U.S. government debt
prices fell on Thursday after Greece agreed to
stringent fiscal and austerity measures needed to secure
critical bailout funds, cutting the safety bid for bonds.
The desire to cut prices before a $16 billion auction of
30-year bonds and more evidence of U.S. labor market
improvement, a drop in new jobless claims, also hurt safe-haven
U.S. government debt. In contrast, stocks
rose.
"Greece was the biggest story; and we also had another good
number on jobs," said Paul Montaquila, vice president for
fixed-income at San Francisco-based Bank of the West. "There's a
definite trend toward more tolerance of risk, and less need for
safe-haven assets like Treasuries -- at least for today."
The diminished fervor for Treasuries pushed their prices
lower and their yields higher. The 30-year yield rose to its
highest level since mid-November, while benchmark 10-year yields
hovered at about two-week highs, according to Tradeweb.
The U.S. 30-year Treasury bond fell 25/32, its yield rising
to 3.19 percent from 3.15 percent late on Wednesday.
Benchmark 10-year Treasury notes fell 17/32, their yield
rising to 2.05 percent from 1.98 percent late on
Wednesday.
Greek leaders clinched a long-stalled deal on reforms and
austerity measures needed to secure a bailout and avoid a messy
default, hours before the country's financial backers were to
meet in Brussels on Thursday.
Markets have feared that without more aid, Greece
would default on its debt, causing chaos akin to the global
credit crunch triggered by Lehman Brothers' collapse in 2008.
"Anything that lessens uncertainty is positive for risk
assets and, at the margin, removes some of the allure of
safe-haven Treasuries," said Michael Finnegan, chief investment
officer at Des Moines, Iowa-based Principal Management Corp,
with about $60 billion in assets under management.
That included the Labor Department's report that the number
of Americans signing up for new unemployment benefits fell
15,000 last week, he said. The decline brought the four-week
moving average of new jobless claims near a 4-year low, a level
that could signal sustained labor market strength.
With Greece likely to clinch financial relief soon, the
market turned its attention to underwriting the last part of
this week's $72 billion Treasury quarterly refunding.
The $16 billion in 30-year bonds sold at a high yield of
3.24 percent, awarding 98.13 percent of the bids at the high.
The ratio of bids received over those accepted was 2.47, the
best for a refunding since last February, said John Canavan,
market analyst at Stone & McCarthy Research Associates in
Princeton, New Jersey.
The Federal Reserve bought $4.95 billion in Treasuries due
in 2018 to 2019 as a part of its $400 billion "Operation Twist"
program designed to push down long-term interest rates and spur
the economy.