NEW YORK (MarketWatch) -- Treasury prices declined Tuesday, pushing yields up, after a pair of reports said retail sales and wholesale prices rose more than forecast in June. Yields on 10-year notes (UST10Y 3.43, +0.07, +2.21%) rose 6 basis points, or 0.06%, to 3.41%. Yields move inversely to prices. Two-year note yields (UST2YR 0.90, +0.00, +0.45%) increase 1 basis point to 0.91%. Sales at retail stores rose 0.6% last month, the most in five months and mostly attributable to a bounce in auto sales and rising gasoline prices, the Commerce Department said. That topped expectations for a 0.5% increase, according to a MarketWatch survey of analysts. Excluding automobiles, sales rose 0.3%, while Wall Street expected a 0.7% increase. See more on retail sales. Separately, the Labor Department said producer prices rose 1.8% in June, the most since November 2007 and more than the 1.2% expected. Excluding food and energy, so-called core prices increased 0.5%. See more on PPI. "Core PPI was anything but tame at 0.5%, which drove Treasury yields sharply higher," analysts at Action Economics said. Treasurys were also under pressure amid optimism for corporate earnings, though pared losses as benchmark equity indexes fell into negative territory. Goldman Sachs (GS 150.26, +0.82, +0.55%) and Johnson & Johnson (JNJ 58.07, +0.35, +0.61%) both reported second-quarter earnings that topped Wall Street expectations. See more on Goldman Sach's quarterly results. Fed buyback Also providing some support for bonds, the Federal Reserve bought $7.5 billion in debt maturing in 2011 and 2012. See more on buybacks on Fed's Web site. Dealers offered $14.73 billion to be purchased. The operation is the first of two this week as the Fed continues its efforts to keep a lid on Treasury yields, which are the benchmarks for a broad range of corporate and consumer borrowing rates. At the four previous buybacks in this maturity range, the central bank purchased between $6.9 billion to $7.5 billion, according to William O'Donnell, head of Treasury strategy at RBS Securities. Before the results were released, he noted that recent Fed buybacks have come on the low end of historical ranges and was looking for the same at Tuesday's buyback. Yields are likely to remain in a narrow range while awaiting second-quarter earnings, more data, and comments from Fed Chairman Ben Bernanke in his semi-annual testimony to Congress later in the month, said Chris Ahrens, a U.S. interest-rate strategist at UBS Securities. "The range trade is likely to persist until the flow of information provides the next spur to direction," Ahrens wrote in a research note. Two-year yields are likely to remain between 0.95% and 0.80% in the near term. Ten-year yields may remain between 3.25% and 3.54%, he said, a range they've closed between since June 25.

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