TREASURIES-U.S. bond market rebounds on weak data, Greece

* U.S. sells $18 bln 5-year TIPS to mediocre demand

* AT&T (Sao Paolo: ATTB34.SA - news) bond deal lures investor attention from Treasuries

* Steep fall in U.S. new home sales revives economic worries

(New (KOSDAQ: 160550.KQ - news) throughout, updates prices and market activity)

By Richard Leong

NEW YORK, April 23 (Reuters) - U.S. Treasuries yields fell

on Thursday with benchmark yields retreating from 3-1/2 week

highs as investors stepped back in the bond market a day after a

broad selloff in Treasuries, German Bunds and British Gilts.

A larger-than-expected 11.4 percent drop in domestic new

home sales in March, together with disappointing global factory

data, rekindled doubts about whether the U.S. economy is strong

enough for the Federal Reserve to raise interest rates this

year.

"The weaker economic data certainly helped pulled some bids

back into the market," said Andrew Richman, fixed income

strategist at SunTrust Private Wealth Management in Palm Beach,

Florida.

Uneasiness about Greece and its future in the euro zone also

underpinned safe-haven demand for Treasuries.

Greek Prime Minister Alexis Tsipras called for a speeding up

of work to conclude a reform-for-cash deal with euro zone

creditors to keep his country afloat after talks with German

Chancellor Angela Merkel on Thursday.

Benchmark U.S. 10-year Treasury note yields fell

3.5 basis points to 1.937 percent after hitting 1.993 percent on

Wednesday, which was the highest in 3-1/2 weeks, according to

Reuters data.

The 30-year bond yield slipped 3 basis points

from late Wednesday to 2.623 percent, a day after reaching 2.679

percent, the highest in five weeks.

Analysts blamed Wednesday's market downdraft on factors

including a perceived hawkish tilt in the minutes of the Bank of

England's previous meeting and investors paring heavy holdings

in Bunds due to the European Central Bank's bond purchase

programs, and concerns about Greece.

The number of Americans filing for first-time jobless

benefits rose unexpectedly last week by 1,000 to 295,000, but

the underlying trend was seen consistent with employers hiring

more workers.

Thursday's drop in yields was also limited by gains on Wall

Street where the Standard & Poor's 500 and Nasdaq composite was

on track to record closing highs.

On the supply front, the Treasury Department sold $18

billion of five-year Treasury Inflation-Protected Securities

to mediocre demand.

Low-yielding Treasuries were overshadowed by a robust

corporate bond sector where AT&T launched a $17.5 billion deal,

which is the third biggest ever, according to IFR, a unit of

Thomson Reuters.

(Reporting by Richard Leong; Editing by Peter Galloway and

David Gregorio)