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TREASURIES-Yields rise ahead of auction as stocks recover

* Stocks stabilize, reducing bid for bonds

* Treasury to sell $23 billion 10-year notes

* Yellen comments seen slightly dovish

By Karen Brettell

NEW YORK, Feb 10 (Reuters) - U.S (Other OTC: UBGXF - news) . Treasury yields increased on Wednesday as stock markets stabilized, reducing demand for safe haven debt, and before the United States is due to sell $23 billion in new 10-year notes.

European stocks rebounded as concerns about the health of banks that have hammered shares globally in recent days eased and oil prices recovered from Tuesday's steep falls.

Comments by U.S. Federal Reserve Chair Janet Yellen acknowledging recent market turmoil offset some of the Treasury weakness.

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Tightening financial conditions driven by falling stock prices, uncertainty over China and a global reassessment of credit risk could throw the U.S. economy off track from an otherwise solid course, Yellen said in prepared testimony.

"The Treasury market is off a little bit because European equities and domestic equities caught a stabilizing bid of some sort ahead of Yellen," said Ian Lyngen, a senior government bond strategist at CRT Capital in Stamford, Connecticut.

Yellen's comments were "generally dovish but not particularly indicative of a Fed that's changed course," Lyngen added.

Yellen will take questions from Congress after presenting her testimony later on Wednesday.

Benchmark 10-year notes were last down 4/32 in price to yield 1.74 percent, up from 1.72 percent late on Tuesday. (Editing by Lisa Von Ahn)