TREASURIES-Safe-haven buying takes yields to 50-year lows

* Benchmark yields reach 50-year lows in safe-haven buying

* Global equity rout adds to safe-haven bid for bonds

* Weak factory data adds to evidence of struggling economy

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By Chris Reese

NEW YORK, Dec 1 (Reuters) - U.S. Treasury debt prices rose on Monday in safe-haven buying that took benchmark yields to their lowest level in 50 years as investors continue to fret over the skidding world economy.

U.S. stocks plunged on Monday after a global equity rout that hit stocks in Asia and Europe, spurring investors to again turn to lower-risk government debt. Bonds were also supported by more evidence of a struggling economy after data showed U.S. factory activity in November was the weakest since 1982.

Price strength was particularly pronounced in longer-dated Treasuries.

"The safe-haven bid seems to be moving out the curve," said Thomas di Galoma, head of U.S. Treasury trading at Jefferies & Co in New York.

Benchmark 10-year Treasury notes US10YT=RR were trading 22/32 higher in price for a yield of 2.85 percent from 2.92 percent late on Friday. The yield, which moves inversely to price, fell to 2.79 percent, the lowest level in at least five decades.

The 2-year note US2YT=RR was trading 4/32 higher in price for a yield of 0.93 percent, down from 1.01 percent late on Friday and below the Federal Reserve's target rate for overnight lending between banks of 1.00 percent.

"Stocks have taken it on the chin this morning after a nice run last week and back-end Treasury yields have forged new all-time lows this morning, too," said William O'Donnell, head of U.S. interest rate strategy at UBS Securities in Stamford, Connecticut.

But some investors cautioned U.S. Treasury yields may be running out of room to fall further, after being taken to record levels by investor need for low-risk assets in a flagging global economy and a persistent credit crisis.

"We have growing concerns expressed, ... for some weeks now, that the crowd in Treasuries is getting too thick," O'Donnell said.

Still, investors expect the Federal Reserve to continue to cut benchmark rates, with fed fund futures implying a 66 percent chance the central bank will slash its target rate by 50 basis points at its next scheduled meeting on Dec. 16.

Investors were waiting for a speech from Fed Chairman Ben Bernanke on Monday for clues to the direction of U.S. monetary policy and programs intended to prop up the financial industry. Bernanke was scheduled to speak at about 1:30 p.m. (1830 GMT).

The Institute for Supply Management on Monday said its index of national factory activity fell to 36.2 in November, the lowest reading since 1982, from 38.9 in October. The November reading was below economists' median forecast of 37.0.

A reading below 50 indicates contraction in the sector.

A separate report showed U.S. construction spending fell a steeper-than-expected 1.2 percent in October after the prior month was revised to unchanged.

Five-year Treasury notes US5YT=RR were trading 12/32 higher in price for a yield of 1.84 percent from 1.92 percent late on Friday, while the 30-year bond US30YT=RR was trading 1-29/32 higher for a yield of 3.35 percent from 3.44. (Editing by Leslie Adler)