(Recasts, updates yields, adds auctions and analyst comments) By Karen Pierog CHICAGO, Feb 18 (Reuters) - U.S. Treasury yields turned lower on Thursday as risk appetite waned, pushing Wall Street stock indexes down, while the latest debt auction had a weak showing. The benchmark 10-year yield, which touched 1.333% on Wednesday, its highest level since Feb. 27, 2020, was last down 1.3 basis points at 1.2855%. "Today, I think it has to do with weakness in equities," said Andrew Brenner, head of international fixed income at NatAlliance, pointing to the reason for the downward shift in yields. Wall Street"s main indexes fell with investors moving out of big technology firm stocks and as an unexpected rise in weekly jobless claims indicated a fragile labor market recovery. The Treasury market has been choppy after a runup in longer-dated yields so far this year "caught a lot of people offside," according to Brenner. Tony Rodriguez, head of fixed income strategy at Nuveen, said the market was establishing a new trading range, partly in response "to much greater growth prospects." He added that the 10-year yield is resetting and could eventually climb to the 1.5% to 2% range. "Anywhere in there towards the end of the year is consistent with better growth, an economy that"s moving forward in terms of opening up because the (COVID-19) vaccine is rolling out, and more importantly, that"s not a problematic level for the non-Treasury markets: equities, credit spreads, etcetera," Rodriguez said. Meanwhile, the two-year Treasury yield, the security most sensitive to interest rate expectations, fell to 0.105%, matching a record low reached on Feb. 8. It was last down less than a basis point at 0.1089%. Rodriguez said that while there was some technical potential for the two-year yield to fall further, the probability of that was low. The 30-year Treasury Inflation-Protected Securities (TIPS) yield spiked to -0.050%, its highest level since June, after a weak auction of $9 billion of the securities. The yield was last at -0.060%. The auction ended with a high yield of -0.040% and a below-average bid-to-cover ratio of 2.31 times. The 30-year Treasury yield, which hit a one-year high of 2.112% on Wednesday, turned higher for the session after the auction and was last up less than a basis point at 2.0745%. The Treasury Department announced it will auction $60 billion of two-year notes, $61 billion of five-year notes and $62 billion of seven-year notes next week. On the data front, the U.S. Labor Department reported initial claims for state unemployment benefits totaled a seasonally adjusted 861,000 for the week ended Feb. 13, compared with 848,000 in the prior week. Economists polled by Reuters had forecast 765,000 applications in the latest week. A closely watched part of the yield curve, which measures the gap between yields on two- and 10-year Treasury notes , was last less than a basis point steeper at 117.66 basis points. The spread between five-year notes and 30-year bonds , which is at its widest levels since 2015, was last about 3.7 basis points steeper at 152.57 basis points. February 18 Thursday 3:00PM New York / 2100 GMT Price Current Net Yield % Change (bps) Three-month bills 0.0375 0.038 -0.003 Six-month bills 0.04 0.0406 -0.015 Two-year note 100-8/256 0.1089 -0.002 Three-year note 99-196/256 0.2037 -0.007 Five-year note 99-40/256 0.5481 -0.018 Seven-year note 98-208/256 0.9269 -0.015 10-year note 98-128/256 1.2855 -0.013 20-year bond 99-104/256 1.9109 -0.011 30-year bond 95-144/256 2.0745 0.006 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 9.00 0.00 spread U.S. 3-year dollar swap 10.00 0.25 spread U.S. 5-year dollar swap 12.25 0.25 spread U.S. 10-year dollar swap 7.50 0.00 spread U.S. 30-year dollar swap -21.25 -0.75 spread (Reporting by Karen Pierog; editing by Jonathan Oatis)