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TREASURIES-Yields rise as corporate debt sales weigh

(Recasts with corporate debt sales, adds quotes, details,

updates prices)

* Large corporate debt sales weigh on bonds

* Friday's employment data for February in focus

* Investors evaluate data for indications of rate increase

By Karen Brettell

NEW YORK, March 2 (Reuters) - U.S. Treasury yields rose on

Monday as large sales of corporate debt pressured prices and as

investors continued to question whether the Federal Reserve is

likely to raise interest rates in the coming months.

Pharmaceutical company Actavis (NYSE: ACT - news) on Monday was

marketing bonds that are expected to total $22 billion, the

second largest amount ever sold by a corporate borrower.

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"Corporate deals are weighing on the market, and we've heard

of some allocation out of bonds into equities," said Sean

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

Some companies are likely trying to sell debt before the

Federal Reserve begins raising interest rates, which some expect

may begin in June.

"A lot of guys are looking at what is going on with the Fed

and trying to figure out whether or not the rate rise is going

to be any time soon, and looking to get some deals out before

any of that transpires," Murphy said.

Benchmark 10-year Treasuries were last down

25/32 in price to yield 2.08 percent, the highest since February

24.

Some investors and analysts expect that the Fed will drop

the word "patient" in its forward guidance at this month's

meeting, held on March 17-18, paving the way for a possible rate

rise in June. The Fed said in December that it will be patient

in raising rates, replacing its former pledge to keep rates near

zero for a "considerable time."

The main focus for the market this week will be Friday's

employment report for February. Employers are expected to have

added 240,000 jobs in the month, according to the median

estimate of 100 economists polled by Reuters.

"It's going to be on payrolls' shoulders to show the market

that things aren't slowing down that much," said Gennadiy

Goldberg, an interest rate strategist at TD Securities in New (KOSDAQ: 160550.KQ - news)

York.

"If you have a weaker payroll print and underperformance in

wage growth that could have serious implications for whether the

word 'patient' is removed at the March meeting, and that could

lead to very considerable repricing for Fed hikes," Goldberg

said.

Expectations that the Federal Reserve could hike rates by

mid-year rose in February after a strong U.S. employment report

for January and stronger core consumer prices data, helping the

bonds post their biggest monthly loss since May 2013.

(Editing by Diane Craft)