TREASURIES OUTLOOK-Bond prices edge lower on stronger U.S. housing, factory data

* April existing home sales up 1.3 pct

* Manufacturing grows more than expected in May

* Weekly jobless claims close to seven-year low

* Treasury sells $13 bln in 10-yr TIPS to solid demand

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By Sam Forgione

NEW YORK (Frankfurt: HX6.F - news) , May 22 (Reuters) - U.S. Treasuries prices edged

lower on Thursday after stronger economic data on U.S. existing

home sales and factory activity lifted sentiment, while

larger-than-expected weekly jobless claims failed to spur

safe-haven bids.

The National Association of Realtors said existing home

sales increased 1.3 percent to an annual rate of 4.65 million

units in April, marking the second sales increase in nine

months.

Financial data firm Markit, meanwhile, said its preliminary

or "flash" U.S. Manufacturing Purchasing Managers Index rose to

56.2 in May from 55.4 in April. Economists polled by Reuters

expected a reading of 55.5.

"To justify a further fall in yields, we would need to see

worse economic data," said Anthony Valeri, market strategist at

LPL Financial (NasdaqGS: LPLA - news) in San Diego.

Data showed the number of Americans filing new claims for

unemployment benefits was up 28,000 at 326,000 in the week ended

May 17, above the 310,000 forecast but still near a seven-year

low, pointing to ongoing healing in the labor market.

Prices on 30-year Treasury bonds (Shenzhen: 395031.SZ - news) were last down

6/32 to yield 3.427 percent, from a yield of 3.416 percent late

Wednesday. Benchmark 10-year Treasury notes were

last down 4/32 in price to yield 2.5517 percent, from 2.536

percent late Wednesday.

Two-year Treasury notes last traded roughly flat, to yield

0.346 percent, from 0.339 percent late Wednesday.

Traders also digested minutes from the Federal Reserve's

April policy meeting released Wednesday, which suggested that

the central bank was in no hurry to raise interest rates.

By purchasing $45 billion in bonds per month while keeping

interest rates low, the Fed is injecting liquidity into the

economy and generating greater expectations of inflation, which

pushes up yields on longer-dated bonds, noted Jonathan Lewis,

chief investment officer at Samson Capital Advisors in New York.

The U.S. Treasury sold $13 billion in 9-3/4

inflation-indexed notes on Thursday. Indirect bidders, which

include foreign central banks, bought a record high share of the

notes, according to analysts.

The Fed bought $0.97 billion in Treasuries maturing between

November 2039 and August 2043 as part of its ongoing purchases,

which had a muted impact on Treasuries prices.

Traders also said slight gains in U.S. stocks weighed on

Treasuries prices. The benchmark S&P 500 stock index was

last up 0.24 percent.

(Reporting by Sam Forgione; Editing by Tom Brown and Dan

Grebler)