(Adds analyst comments, details of U.S. data, byline, updates

yields)

By Gertrude Chavez-Dreyfuss

NEW YORK, July 17 (Reuters) - U.S. Treasury yields edged

lower on Thursday, briefly spiking after a batch of data showed

the world's largest economy remained on a stable footing,

supporting the Federal Reserve's patient stance on resuming its

monetary easing policy this year.

"Despite an initial spike in yields, the bulk of the move

has retraced as the market continues to settle into an

all-too-familiar range for U.S. rates," Ian Lyngen, head of U.S.

rate strategy at BMO Capital wrote in e-mailed comments after

the data.

The benchmark 10-year yields were last down 1.2 basis points

(bps) at 4.443%. They rose as high as 4.495%

immediately after the data's release.

U.S. 30-year yields also initially rose after the data, but

were last 2.2 bps lower at 4.992%.

On the short end of the curve, U.S. two-year yields, which

track interest rate expectations, rose 2 bps to 3.905%

.

Thursday's data showed that retail sales rose more than

expected in June, advancing 0.6% last month after an unrevised

0.9% drop in May. Economists polled by Reuters had forecast

retail sales, which are mostly goods and are not adjusted for

inflation, edging up 0.1%.

"Despite uncertainty about the future and weak readings on

consumer confidence, their response has been to buy more,

different things rather than buy fewer," wrote Tom Simons, chief

U.S. economist, at Jefferies in emailed comments after the data.

"Consumers did not react to the tariff announcements or the

resultant decline in financial markets or the weakness in

business and consumer sentiment with defensive recoil. Instead,

they went out and bought big ticket items with an opportunistic

view."

Initial jobless claims also were better than expected,

dropping 7,000 to a seasonally adjusted 221,000 for the week

ended July 12, data showed. Economists polled by Reuters had

forecast 235,000 claims for the latest week.

Another unexpectedly positive data was the Philadelphia Fed

business conditions index for July, rose to 15.9, a five-month

high, up from a June reading of -4.0. The consensus forecast was

for an index -1.0.

U.S. import prices were also lower than expected, rising

just 0.1% in June, compared with forecasts for a 0.3% rise,

suggesting mild tariff-related impact. In the 12 months through

June, import prices fell 0.2%, matching May's decrease.

"The economic indicators this morning...suggested the

economy was solid going into Q3," said Stan Shipley, fixed

income strategist, at Evercore ISI in New York.