TREASURIES-Bonds rise as stocks fall on recession fears

(Updates market action)

NEW YORK, Jan 23 (Reuters) - U.S. Treasuries rose on Wednesday, with the benchmark yield briefly touching its lowest since June 2003, as fears of a global slowdown and more write-downs at European banks spurred a flight into bonds from stocks.

Global equity markets resumed their sell-off, adding to the appeal of ultra-safe Treasuries, as the positive jolt from the Federal Reserve’s surprisingly bold 75-basis-point rate cut on Tuesday faded. Attention again turned to worries about a U.S. recession and its global repercussions, plus banks’ exposure to subprime mortgages, traders said.

“When the Fed cuts 75 basis points, stocks are supposed to go up. That’s not happening. There’s a lot of dread out there,” said T.J. Marta, fixed income strategist at RBC Capital Markets in New York.

The stock market pared its losses because financial shares rose after their initial plunge, in which the Nasdaq .IXIC opened down 2.4 percent into bear market territory.

“Any support stocks show, long-end (yields) will come back off their lows,” said Mary Beth Fisher, director of interest rate strategy at UBS Securities in Stamford, Connecticut.

The price on the benchmark 10-year note US10YT=RR was up 19/32 at 107-22/32 after an earlier high of 108-1/32. The 10-year yield, which moves inversely with its price, was last at 3.35 percent, down 7 basis points from late Tuesday.

A profit warning from Apple AAPL.O on Tuesday added to investors' bearish outlook and in overseas trading, European stocks were down more than 2 percent. See [.N]

Further losses in many international stocks bolstered the support for Treasuries of all maturities. The yield on two-year notes US2YT=RR fell below 2 percent to levels not seen for nearly four years, while long bond yield US30YT=RR hit levels not seen in at least four decades.