TREASURIES-Prices fall on stronger-than-expected retail sales
* February US retail sales show largest rise since September
* Treasury to auction $21 bln of reopened 10-year notes
NEW YORK, March 13 (Reuters) - U.S. Treasury debt prices fell on Wednesday after data showing stronger-than-expected growth in retail sales in February suggested the recovery of the world's largest economy had maintained traction despite the sequestration budget cuts. The Commerce Department said on Wednesday retail sales increased 1.1 percent last month, the largest rise since September, after a revised 0.2 percent gain in January. Economists polled by Reuters had expected retail sales to rise 0.5 percent. "Retail sales are stronger than expected at all levels," said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut. "This will contribute to (gross domestic product) and personal consumption expenditures estimates will be revised as a result." Ader added that the market turned negative on the news. Benchmark 10-year Treasury notes were trading 6/32 lower in price with their yield at 2.04 percent, up from 2.01 percent late Tuesday, while 30-year bonds were trading 10/32 lower to yield 3.23 percent from 3.22 percent. Prior to the release of the retail sales data Treasuries had been trading higher in price. Higher borrowing costs and weak demand at an Italian bond auction, the first after the country's credit ratings were cut demand for low-risk U.S. government debt. The focus on Wednesday will turn to the Treasury's sale of $21 billion of reopened 10-year notes which could benefit from the backup in yields. The Treasury's $32 billion auction of three-year notes on Tuesday was well received and easily absorbed. In the when-issued market, considered a proxy for where the notes will price at auction, 10-year notes were also yielding near 2.04 percent.