TREASURIES-U.S. yields climb as stocks gain on Huawei news

* U.S. existing home sales fall * U.S. eases trade restrictions on Huawei * Markets pare back U.S. rate cut outlook (New throughout, updates prices, market activity and comments) By Gertrude Chavez-Dreyfuss NEW YORK, May 21 (Reuters) - U.S. Treasury yields edged higher on Tuesday, lifted by gains on Wall Street and higher overall risk appetite after the United States eased trade restrictions on Chinese telecommunications equipment maker Huawei Technologies.

The move helped calm fears of escalating trade tensions between the United States and China, analysts said.

Federal Reserve officials made comments suggesting the U.S. economy was more stable than many had thought, even with the trade war. This reduced expectations of a near-term interest rate cut, which fed selling on the short-end of the curve. U.S. two-year yields hit two-week highs.

Yields on U.S. benchmark 10-year notes and 30-year bonds climbed to one-week peaks after Washington temporarily relaxed trade restrictions on China's Huawei.

Last week, the U.S. Commerce Department blocked Huawei from buying U.S. goods, citing national security.

"Everything seems to be predicated on the next developments with the trade talk," said Karissa McDonough, fixed income strategist, at People's United Advisors in Burlington, Vermont. "There has been some reprieve in terms of the technology tariffs, but a reprieve does necessarily mean we have made substantial progress." In late trading, U.S. 10-year note yields rose to 2.429% from 2.414% late on Monday, after hitting a one-week high of 2.435%.

Yields on U.S. 30-year bonds advanced to 2.843% from 2.835% on Monday. The session high was a one-week high of 2.849%.

On the short end of the curve, U.S. 2-year yields rose to 2.26% from Monday's 2.223%.

Boston Fed President Eric Rosengren said he did not expect the trade issue will require looser U.S. monetary policy. This assuaged some concerns about the possibility of a rate cut this year.

"The rate cut outlook has been modestly lower," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York. "We were pricing in a 65 percent possibility of a rate cut by October and now that's down to 50 percent." Yields briefly slipped after data showed U.S. home sales unexpectedly fell in April amid persistent weakness in the lower-priced segment.

Data showed existing home sales fell 0.4% to a seasonally-adjusted annual rate of 5.19 million units last month. March's sales pace was unrevised at 5.21 million units.

May 21 Tuesday 3:24 PM New York / 1924 GMT Price Current Net Yield % Change (bps) Three-month bills 2.34 2.3868 -0.004 Six-month bills 2.35 2.4179 0.005 Two-year note 99-251/256 2.26 0.037 Three-year note 99-196/256 2.2066 0.033 Five-year note 100-22/256 2.2314 0.028 Seven-year note 100-80/256 2.3259 0.022 10-year note 99-132/256 2.4299 0.016 30-year bond 100-160/256 2.8439 0.009 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 5.25 -0.50 spread U.S. 3-year dollar swap 3.75 -0.25 spread U.S. 5-year dollar swap 0.50 -0.25 spread U.S. 10-year dollar swap -5.00 0.00 spread U.S. 30-year dollar swap -27.75 0.25 spread (Reporting by Gertrude Chavez-Dreyfuss Editing by Paul Simao and David Gregorio)