TREASURIES-Prices slide after U.S. debt ceiling bill, Yellen

* Long yields rise to multi-week highs

* U.S. debt ceiling resolution weighs, helps boost yields

* Treasury sells 10-year notes with mixed results

By Gertrude Chavez-Dreyfuss

NEW YORK (Frankfurt: HX6.F - news) , Feb 12 (Reuters) - U.S. Treasury debt prices fell for a second straight session on Wednesday after the U.S. House of Representatives passed a measure on the debt ceiling and a new Federal Reserve chair vowed to maintain the bank's current strategy of reducing asset purchases at a gradual pace.

Yields on U.S. 30-year bonds climbed to three-week peaks, while those on 10-year notes hit two-week highs, as investors backed away from safe-haven Treasuries and sought other, riskier assets such as stocks. Wall Street shares on Wednesday were little changed.

Late on Tuesday, the House of Representatives approved a one-year extension of federal borrowing authority after Republicans gave in to President Barack Obama's demands to allow a debt limit increase without conditions.

The Democratic-controlled Senate voted 67-31 on Wednesday to move straight to a final vote.

"Overall, there's less uncertainty," said David Coard, head of fixed income sales and trading at Williams Capital Group in New York.

"I know that the debt ceiling resolution had a negative effect on the bills yesterday, but it had a positive effect on the longer end. So it all came together to see the selloff that we're seeing."

Also on Tuesday, Fed Chair Janet Yellen said it would take a notable change in the U.S. economic outlook - a significant deterioration in the job market, or if inflation does not rise - for the Fed to pause its tapering plan.

That was all investors needed to push yields higher in a market that had anticipated Yellen, a known dove, to express caution about the Fed's tapering plan.

"We have been expecting rates to gradually rise all year as the Fed continues its tapering program and as the economy gets stronger," said Jennifer Vail, head of fixed income research at U.S. Bank Wealth Management in Portland, Oregon. U.S. Bank oversees $115 billion in assets.

"The reaction you're seeing today and yesterday is about reassurance via Yellen's testimony yesterday that there's noise in the data. It's weather-related. This has been the coldest January and February we've had in over 20 years and that has got to have an impact on vehicle sales, housing starts."

She added that once the economy gets past this cold spell, she expects a resurgence in consumer demand.

In late trading, benchmark 10-year Treasuries were down 13/32 in price to yield 2.76 percent. Ten-year yields earlier hit 2.77 percent, their highest level since Jan. 29.

Thirty-year bonds, meanwhile, fell 23/32 in price to yield 3.72 percent, after hitting three-week peaks of 3.73 percent earlier.

Five-year notes were down 7/32 in price to yield 1.56 percent, while seven-year notes were 9/32 lower with a yield of 2.21 percent.

The Treasury sold $24 billion in U.S. 10-year notes in an auction that was not as strong as expected. The note has a high yield of 2.795 percent, compared with 2.80 percent at the bid deadline.

Total (NYSE: TOT - news) bids were $60.9 billion for a bid-to-cover ratio of 2.54 down from both last month's 2.68 and the 2.69 average.

Indirect bidders, which include foreign central banks, were awarded 49.7 percent of the 10-year note, a little better than the prior month's 46.6 percent and above the 41.8 percent average. Indirect bidders' purchase of the 10-year note auction was the largest share since June.

"Perhaps this is a sign that more foreign buyers feel comfortable with the yield level and were waiting to purchase U.S. Treasuries in size through the auction process instead of in the secondary market," Nomura Securities strategists said in a note.

On Thursday, the Treasury unfurls the last leg of its quarterly refunding: $16 billion in U.S. 30-year bonds, which have seen a mixed reception in the last few auctions.