TREASURIES-Bonds slide after Fed says it will slow purchases

* Bond prices dip after FOMC, but recover some losses

* Fed to extend Treasury purchase program through October

NEW YORK, Aug 12 - U.S. Treasuries prices fell on Wednesday afternoon after the Federal Reserve said it would gradually slow its pace of buying Treasury securities.

To promote a smooth transition in markets, the Fed said it will extend to the end of October its plan to buy $300 billion in total of Treasuries.

"It strings out the purchases and suggests there is not as much support from purchases as there was, which is not good for Treasury ownership," said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland.

Benchmark 10-year Treasuries, which were down 11/32 before the announcement, briefly doubled their losses, before coming back to a loss of 16/32. Ten-year notes yielded 3.75 percent, still below a two-month high of 3.89 percent set last Friday.

The 30-year bond, down 1-4/32 before the Fed's statement, briefly fell to a nearly two-point loss, before reversing some of the slide to post a loss of 1-20/32.

A weak 10-year Treasury note auction in earlier in the session also weighed on Treasuries prices.

The auction "was kind of a disaster in the making," said Chris Rupkey, vice president and chief financial economist at Bank of Tokyo/Mitsubishi in New York. The dealers had to bid on the securities with a Fed statement imminent and that created "extreme uncertainty," he said.

A stock market rally also unwound some of the recent safety bid for U.S. government debt, helping to keep downward pressure on Treasuries prices and pushing yields higher.

The three major U.S. stock indexes were up on Wednesday afternoon, though below session highs.