TREASURIES-Bonds rise as credit worries spur safety bids

(Updates market prices, changes byline)

* Renewed credit worries boost bond prices

* Losses at UBS, JPMorgan fan worries about economic drag

* Analysts downgrade outlook on Goldman Sachs

* Surprise June narrowing in trade gap is overshadowed

By Richard Leong

NEW YORK, Aug 12 (Reuters) - U.S. Treasury debt prices rose on Tuesday as renewed credit fears triggered a stock market sell-off and revived appetite for safe-haven government debt.

Credit worries ratcheted higher after Swiss bank UBS AG (UBSN.VX) posted another $5 billion in write-downs and JPMorgan Chase & Co (JPM.N), the No. 3 U.S. bank, said it has suffered $1.5 billion in losses so far this quarter.

Not even Goldman Sachs (GS.N), which has been relatively unscathed by the credit crunch that has pummeled its Wall Street rivals, was immune. Three analysts downgraded their outlook on the biggest U.S. securities firm, citing continued pressure on the financial markets.

"Today we saw a safe-haven trade into Treasuries due to concerns about financials," said Brian Edmonds, head of rates trading at Cantor Fitzgerald in New York.

Concerns about credit woes in the financial sector and the ongoing pullback in commodity prices overshadowed a surprise contraction in the U.S. trade deficit in June and a pause in the recent surge in the dollar, analysts said.

Some traders have pulled money out of the red-hot oil and commodity markets and shifted it into U.S. stocks and bonds, Edmonds said. "There's a correctional flow into the dollar with pretty good flows out of oil and commodities," he added.

U.S. crude futures CLc1 shed $1.44 to settle at $113.01 a barrel, or about 23 percent below the record set in July.

The U.S. benchmark 10-year Treasury note US10YT=RR jumped 21/32 in price to 100-22/32. Its yield, which moves inversely to its price, fell to 3.92 percent down from 4 percent on Monday.

Two-year Treasuries' price US2YT=RR rose 7/32 to yield 2.45 percent, down from 2.56 percent late on Monday.

On Wall Street, the three key U.S. stock indexes ended down as much as 1.2 percent in light trading.