NEW YORK (MarketWatch) -- Treasurys gained Wednesday, remaining higher after the government said U.S. retail sales fell last month by more than forecast. Two-year note yields fell 11 basis points to 1.73%. The Commerce Department said sales dropped 1.2% in September. The median forecast of economists surveyed by MarketWatch was for a 0.8% decline. Excluding automobiles, sales fell 0.6%, also more than anticipated. A separate report showed producer prices fell 0.4% last month, less than expected. The data may buoy investors who expect the economy to weaken further. "The U.S. economy appears to be in a recession," said San Francisco Federal Reserve President Janet Yellen in a speech delivered late Tuesday. Fed Chairman Ben Bernanke will be speaking on the economic outlook and financial markets in a speech at 12:15 p.m. Eastern.
