Brazil stocks seesaw on Petrobras dip, real weaker

SAO PAULO Jan 14 (Reuters) - Brazilian stocks seesawed in early trading on Thursday, as gains in mining company Vale and steelmakers offset losses in oil giant Petrobras.

The benchmark Bovespa index .BVSP was little changed at 70,404.34 after it spent part of the morning in negative territory. The index closed higher the previous session.

State-controlled Petrobras (PETR4.SA) dropped 0.28 percent to 36.20 reais, off earlier lows, as crude oil CLc1 edged higher.

Brazil is gearing up for the eventual tapping of massive subsalt oil reserves, in which Petrobras will play a key role.

But uncertainty lingers over remaining details of the process, said Andre Luis Querne, a partner at asset management firm Rio Gestao de Recursos. "There are a lot of doubts about how it's going to be," he added.

Discouraging data from the United States also took a toll.

Sales at U.S. retailers unexpectedly fell in December and applications for jobless benefits rose last week, raising concerns about the recovery in the world's biggest economy. For details, see [ID:nN14168822]

The downbeat U.S. data came as Brazil reported November retail sales rose 1.1 percent over the previous month but were weaker than expected. Sales were seen increasing 1.4 percent, according to the median forecast of 16 economists in a Reuters poll. [ID:nN14117122]

Shares of many Brazilian retailers slipped. Lojas Americanas (LAME4.SA) lost 0.71 percent to 15.28 reais, and Lojas Renner (LREN3.SA) shed 0.28 percent to 39.84 reais.

However, Grupo Pao de Acucar PCAR5.SA, Brazil's largest retailer, added 1.33 percent to 67.08 reais. The company reported Thursday that fourth-quarter net sales surged 44.6 percent after its takeover of the Ponto Frio home appliances chain. [ID:nN14109833]

Brazil's currency, the real BRBY, weakened 0.28 percent to 1.766 per dollar as the greenback edged higher against a basket of major currencies .DXY.

Mining companies and steelmaker CSN limited losses. Vale (VALE5.SA), the world's largest iron ore producer, rose 0.43 percent to 46.71 reais, while MMX (MMXM3.SA) continued put on 3.41 percent to 15.76 reais. The shares benefited from higher expectations in 2010 for the price of iron ore.

Steelmaker CSN (CSNA3.SA) gained 1.5 percent to 59.38 reais as Grupo Camargo Correa offered on Wednesday to buy a minority stake in Portugal cement company Cimpor (CPR.LS) to trump CSN's bid. [ID:nLDE60C1TU]

Yields on Brazilian interest rate futures contracts <0#DIJ:> ticked higher.

The yield on the contract due January 2011 DIJF1 edged up to 10.31 percent from 10.3 percent. The yield on the contract due July 2010 DIJN0 inched higher to 9.09 percent from 9.08 percent.

Both were among the most active contracts in early trade.

Investors use the contracts to bet on trends in the country's benchmark interest rate, the Selic, currently at a record low 8.75 percent. (Reporting by Luciana Lopez; editing by Jeffrey Benkoe)