* Spain, Italy political news revive bids for bonds * Bond yields hit 9-month highs in overnight sell-off * Fed to buy $2.75 bln to $3.50 bln debt due 2020-2022 * U.S. Dec factory orders data on tap By Richard Leong NEW YORK, Feb 4 (Reuters) - U.S. Treasuries prices rose on Monday as bargain-minded investors emerged and pushed benchmark yields back below 2 percent after they climbed overnight to their highest levels in over nine months. Through Friday, Treasuries prices suffered their second weekly decline on an improved outlook on the U.S. economy and less anxiety about the festering fiscal problem in Europe. "We hit some important support levels and we are now coming back a bit," said Thomas Roth, executive director of U.S. government bond trading at Mitsubishi UFJ Securities USA in New York. Cautious investor optimism, which stoked Wall Street stocks to five-year highs last week, was challenged over the weekend. Worries about possible political shake-ups in Europe and their effect on the region's fiscal problems resurfaced, although initially they did not cause a knee-jerk safe-haven buying of low-risk government debt. They did cause steady weakness in Italian, Spanish and other government debt in peripheral euro zone nations. This eventually revived safe-haven buying of German Bunds, spilling over to the Treasuries market, analysts said. "The market stabilized on these news from Europe," said Thomas Roth, executive director of U.S. government bond trading at Mitsubishi UFJ Securities USA in New York. Spain's opposition party on Sunday called for the resignation of Prime Minister Mariano Rajoy over a corruption scandal, as Rajoy sought to pull euro zone's fourth biggest economy out of five years of financial woes. In Italy, the increased popularity of former prime minister Silvio Berlusconi and his chances of regaining power also raised worries about Italy's struggle to fix its fiscal problems. Benchmark 10-year Treasury notes were 10/32 higher in price at 96-24/32 with a yield of 1.991 percent, down 3.6 basis points from late on Friday. The 10-year yield earlier climbed to 2.059 percent, which was its highest level since last April 12 when it touched an intraday peak of 2.065 percent, according to Reuters data. Other factors that could propel bond prices higher this week included the absence of new longer-dated government debt supply and the ongoing bond purchases from the Federal Reserve aimed to support the economic recovery, traders and analysts said. The U.S. central bank will buy $2.75 billion to $3.50 billion in Treasuries that mature between Feb. 2020 and Nov. 2022 at 11 a.m. (1600 GMT), which is part of its $44 billion purchase of Treasuries in February.