TREASURIES-Bonds flat as Wall Street seen opening higher

NEW YORK, Aug 2 (Reuters) - U.S. government bonds were little changed on Thursday as stock futures pointed to a slightly higher open on Wall Street.

But lingering worries over a deteriorating lending environment is expected to keep a support under Treasuries. Investors are concerned that worsening credit conditions and a crisis in the subprime mortgage market could crimp economic growth.

"It's going be volatile today. The (stock) futures seem to be edging up. Investors are going to be watching for news on further subprime losses," said David Dietze, chief investment strategist at Point View Financial Services in Summit, New Jersey.

Benchmark 10-year Treasury notes were flat in price for a yield of 4.80 percent, versus 4.79 percent late on Wednesday.

Yields, which move inversely to prices, had dipped toward two-month lows in Asian trade after the Nikkei share average (.N225: Quote, Profile, Research) briefly surrendered early gains.

U.S. stock index futures traded higher as overseas equities markets gained on positive earnings reports, helping to calm Wall Street's nerves following Wednesday's unusually volatile session. For details, see [.N]

"The market will be tuned by equities, it will depend what U.S. stocks do this afternoon, if they continue to recover then yields should go higher in the U.S.", said Peter Mueller, interest rate strategist at Commerzbank in London.

A late rally on Wall Street combined with profit-taking to push yields higher on Wednesday.

Data due for release on Thursday includes the weekly jobless claims report at 08:30 a.m. (1230 GMT), durable good and factory orders at 10:00 a.m. (1400 GMT).

Treasuries were little moved on Wednesday by weaker-than-expected manufacturing and private sector jobs reports, with investors' attention focused on the stock market.
Data on initial jobless claims and June factory orders due for release during the session was likely to be overshadowed by events on the stock market, analysts said.

(Additional reporting by Tahani Karrar in London)