NEW YORK (CNN/Money) - Treasury bonds declined and the dollar rose Friday after a strong showing in monthly reports on consumer sentiment, retail sales and producer prices temporarily boosted investor confidence in the sluggish economy.

The stock market gave back early gains and closed modestly lower.

With the war in Iraq nearing its conclusion with an apparent U.S. victory, investors can now refocus on the struggling U.S. economy.

At around 4:30 p.m. ET, the 10-year note fell 9/32 of a point in price to 99-5/32, pushing the yield up to 3.98 percent from 3.94 percent late Thursday afternoon. The 30-year bond fell 3/16 to 106-11/16, modestly raising the yield to 4.95 percent from 4.94 percent late Thursday.

The two-year note lost 2/32 to 99-30/32, pushing the yield up to 1.65 percent, while the five-year note fell 6/32 to 100-15/32, pushing the yield up to 2.90 percent.

The dollar bought ¥120.40, up from ¥119.60 late Thursday. The euro bought $1.0755, down from $1.0788 late Thursday.

"The focus has already shifted back to fundamentals now that the Iraq war is essentially behind us," said Anthony Karydakis, senior financial economist with Bank One Corp. "I would take it one week at a time to get a signal of whether there will be another Fed ease or not."

Although some economists said Friday's data, in total, diminished chances for another interest rate cut by the Federal Reserve, the nation's central bank, there remains a sense that the economy is still not out of the woods.

"Prospects for an intermeeting rate cut have been tossed in the dustbin, and chances for a May rate cut are maybe one in four," said Chris Rupkey, senior financial economist with Bank of Tokyo Mitsubishi.

Lower rates would tend to boost stock and bond prices since they would stimulate the economy, though they could hurt the dollar, since U.S. investments might be less attractive to investors overseas.

The University of Michigan's preliminary April reading on consumer sentiment, released shortly after the stock market opened, rose to 83.2 in April from 77.6 in March, according to Reuters. Economists surveyed by Reuters were expecting a reading of 78.1.

March retail sales rose a surprising 2.1 percent after falling a revised 1.3 percent in February. And wholesale prices jumped 1.5 percent in March after gaining 1 percent in February, the Labor Department said, a much bigger rise than economists had forecast. Stripping out volatile food and energy costs, so-called "core" producer prices rose by 0.7 percent, when economists expected that it would hold steady.  

--from staff and wire reports