TREASURIES-U.S. yields rise on home data, corporate deals

* U.S. to sell $35 bln 5-year notes as FOMC sets to meet

* Solid U.S. home appreciation soothes some

worries-Case-Shiller

* Hedging on large corporate bond deals propels yields

higher

* Surprise drop in consumer confidence limits bond selling

By Richard Leong

NEW YORK, April 28 (Reuters) - U.S. Treasuries yields rose

on Tuesday as investors made room ahead of a $35 billion sale of

five-year government debt and reduced their bond holdings before

the start of a two-day Federal Reserve policy meeting.

A stronger-than-expected February rise in U.S. home prices

according to data from Standard & Poor's and Case-Shiller and

hedging on a pair of huge corporate bond issues compounded to a

sell-off in bonds.

"The deals are weighing on the market whether it's

rate-locking or just an increase in net supply," said Sean

Murphy, a Treasuries trader at Societe Generale (Paris: FR0000130809 - news) in New York.

Treasuries yields scaled back from their session highs

following a surprise drop in the Conference Board's index on

U.S. consumer confidence to its lowest level since December.

The market decline was also limited by the absence of a

breakthrough in talks between Greece and its creditors. Greek

borrowing costs have fallen since Monday on hopes

Athens will soon obtain more cash after Greek Prime Minister

Alexis Tsipras reshuffled his negotiation team.

In early U.S. trading, the yield on benchmark 10-year

Treasuries notes was up 2.5 basis points from late

on Monday to 1.949 percent.

The 30-year bond yield was 3.5 basis points

higher at 2.647 percent.

The 10-year yield has traded in a tight 0.21 percentage

point since the Federal Open Market Committee meeting in March

when it downgraded its economic outlook.

The Fed's policy-setting group is scheduled to released a

statement at 2 p.m. (1800 GMT) on Wednesday.

On balance, domestic data have come in weaker-than-forecast,

supporting bets the U.S. central bank might leave rates near

zero into late 2015.

On Tuesday, S&P/Case Shiller said their gauge on home prices

in 20 U.S. cities grew 5.0 percent in February from a year ago,

stronger than the 4.7 percent increase projected by analysts.

The upbeat data were mitigated by an unexpectedly drop in the

Conference Board's index on U.S. consumer confidence in April.

On the supply front, large corporate deals have competed for

investors' attention with Amgen (Xetra: 867900 - news) and Oracle (NYSE: ORCL - news)

said bringing out multi-part issues in the $2 billion to $3

billion area, and $8 billion to $10 billion area, respectively.

Shortly after 1 p.m. (1700 GMT), the Treasury Department

will announce the results on its five-year note sale

, part of this week's $90 billion in fixed-rate

supply.

(Reporting by Richard Leong; editing by Grant McCool)