TREASURIES-Safe-haven bidding gives debt prices a boost

*Debt prices rise with bidding for lower-risk assets

*Stock futures point lower, Wal-Mart sales disappoint

*Debt gains capped by jobless claims, pending auction (Adds strategists' quotes, updates prices, adds byline)

By Chris Reese

NEW YORK, Jan 8 (Reuters) - U.S. Treasury debt prices rose on Thursday in safe-haven bidding as stock futures pointed to a weaker open on Wall Street after more disappointing news on consumer spending.

December sales by Wal-Mart Stores Inc (WMT.N), the world's largest retailer, fell short of expectations and fanned worries that the U.S. recession was deepening. The gloomy outlook had investors buying into lower-risk government debt.

Gains were limited however after the number of weekly jobless claims came in below expectations, and by concerns over a wave of new debt supply.

Bonds were boosted by "the weakness in the stock market, along with poor Wall-Mart news and other retailers are showing that the holiday season was not very jolly," said Kim Rupert, managing director of global fixed income analysis at Action Economics in San Francisco.

Benchmark 10-year Treasury notes US10T=RR were trading 8/32 higher in price for a yield of 2.47 percent compared with 2.50 percent late on Wednesday, while the two-year note US2YT=RR traded unchanged for a yield of 0.83 percent.

Data released on Thursday morning showed initial claims for state unemployment insurance benefits fell to a seasonally adjusted 467,000 in the week ended Jan. 3, which was below economists' forecasts for a reading of 540,000.

Still, expectations remain for a big decline in monthly payrolls numbers, to be released on Friday. Those expectations were also helping prop up debt prices.

"I don't think the improvement in today's initial claims will shift expectations for tomorrow's payrolls number," said Jane Caron, chief economic strategist at Dwight Asset Management in Burlington, Vermont, adding "Treasuries will probably stay bid at least until tomorrow morning's payrolls data."

The median of forecasts from economists polled by Reuters is for December non-farm payrolls to have declined by 550,000 after a fall of 533,000 in November.

Treasury gains were also handicapped by worries over loads of new debt supply this week, which many analysts expect to dilute the market and push yields higher.

The Treasury is auctioning a total of $166 billion of new debt this week, marking the third largest weekly issuance on record. As part of those sales, the Treasury will auction $16 billion of reopened 10-year Treasury notes on Thursday afternoon.

Five-year notes US5YT=RR were trading 3/32 higher in price for a yield of 1.65 percent from 1.66 percent late on Wednesday, while the 30-year bond US30YT=RR rose 7/32 to yield 3.03 percent, down from 3.04 percent. (Additional reporting by John Parry; Editing by Andrea Ricci)