NEW YORK (MarketWatch) -- Treasury prices rose Friday, pushing yields back toward significant lows, after a government report showed U.S. retail sales rose a little less than economists expected, adding to evidence that economic growth is slowing. A separate report that showed core consumer prices rose 0.9% over the past year also relieved worries about rapid inflation, which erodes the value of fixed-income bond payments. Yields on 10-year notes (UST10Y 2.71, -0.03, -1.24%) , which move inversely to prices, fell 2 basis points to 2.73%, near the lowest since April 2009. A basis point is 0.01%. Two-year yields (UST2YR 0.54, -0.01, -1.46%) declined 1 basis point to 0.54%, after having touched a record low set earlier this week. Yields on 30-year bonds (UST30Y 3.91, -0.04, -0.96%) , most sensitive to inflation expectations, fell 4 basis points to 3.92%. Retail sales increased 0.4% in July, the Commerce Department said. Excluding autos, sales rose 0.2% last month. Read about retail sales. The details of the report give "a sense that the loss of momentum in the second quarter has carried forth to early in the fourth quarter," said strategists at CRT Capital Group. Separately, the Labor Department said the consumer price index rose 0.3% last month. Excluding food and energy, retail-level inflation rose 0.1%. See more on CPI. Bonds "will continue to focus on the anemic growth story as well as deflationary forces that will be prevalent for some time," said Tom di Galoma, head of U.S. rates trading at Guggenheim Partners. Treasury prices had moved higher before the U.S. data came out, amid lingering concerns about prospects for some European countries, in spite of positive data on economic growth reported by Germany and France. See more on Europe's GDP. "Better growth data out of Europe is providing little lift to risk assets this morning, as periphery concerns continue to bubble under the surface," said strategists at RBS Securities. On Thursday, 10-year yields rose for the first day in six as the market tried to find the bottom of a new range after the Federal Reserve said it would again be buying Treasury debt. Read Thursday's Bond Report. "The price action Thursday gave us some hints that we've reached a level so to speak from which the market can settle into a range," CRT strategists said. Support for the range is around 2.84%, they said. TODAY'S TOP MARKET STORIES S&P 500 (1 YEAR) 1,3001,2001,1001,000900 SON10FMAMJJ • Market Snapshot: U.S. stocks in focus • Today's biggest advancing, declining stocks • Sign up for free, breaking-news email alerts EARNINGS WATCH | Earnings, updates, warnings THE MARKET BY SECTOR | Industries • Tech Stocks | Energy Stocks | Retail Stocks • Financials | Airline Stocks | Pharma and Biotech EXPANDED MARKETS NEWS • Bonds | Oil news | Gold news • Currencies | Market Data | Economic Calendar • See all the latest markets video Also lending support to bonds, the Fed's purchases of Treasury debt, with proceeds from maturing mortgage-related assets, will begin on Tuesday. It will buy an undetermined amount of debt maturing between August 2014 and July 2016, the New York Fed said Wednesday. See Fed's buyback schedule. Yields on benchmark 10-year notes ended last week at 2.82%, on pace to fall for a third week. Yields on 2-year notes are little changed from 0.51% last week, after falling for the past four weeks. Thirty-year yields were at 3.92% a week ago. Treasurys of all maturities have returned 0.74% this month, according to an index compiled by Bank of America Merrill Lynch. For the year, they've gained 7.39%. Corporate bonds are also up 0.74% this week, contributing to 9.07% returns in 2010. B. of A.'s index of high-yield bonds has slipped 0.06% this week, but is still up 8.3% this year.

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