Brazilian stocks slide on mixed U.S. indicators

(Updates to close)

SAO PAULO, March 12 (Reuters) - Brazilian stocks fell on Friday after mixed economic data from the United States prompted wariness and subsequent profit-taking among investors.

The benchmark Bovespa index .BVSP slipped 0.78 percent to 69,341.38, its second straight session of losses.

The index gained early in the session on better-than-expected retail sales in the United States but changed direction after U.S. consumer confidence numbers showed a dip in March from February. [ID:nN12202974] and [ID:nN12128535]

Stocks in the United States, the world's largest economy, ended little changed on the mixed signals [ID:nN12166242]

"Things were a bit mixed in the United States," said Pedro Paulo Silveira, chief economist with Gradual Investimentos. "People took advantage of that to book some profits."

Brazil's currency, the real BRBY, strengthened 0.4 percent to 1.763 per dollar as the greenback fell against major currencies.

"People are just waiting for the next possible negative catalyst," said Paul Biszko, senior strategist at RBC Capital Markets in Toronto. "In the meantime we're slowing grinding stronger."

Investors saw the possible continuation of near-zero interest rates in the United States on news that the president of the San Francisco Federal Reserve Bank, Janet Yellen, could be nominated to the No. 2 spot at the U.S. central bank.

Yellen is considered "dovish," meaning she is seen to lean toward policies that will boost growth and promote employment rather than those aimed at keeping inflation at bay. [ID:nN12159936]

Low U.S. interest rates last year boosted the so-called carry trade, in which investors used money borrowed cheaply abroad to chase higher yields in Brazilian assets.

Steelmakers and banks were among Friday's drags on the Bovespa.

Itau Unibanco (ITUB4.SA), Brazil's largest private sector bank, slipped 1.61 percent to 37.39 reais. Bradesco (BBDC4.SA) shed 1.03 percent to 31.82 reais. Banco do Brasil (BBAS3.SA), Latin America's largest bank by assets, lost 0.86 percent to 29.90 reais.

Steelmakers gave up gains from recent sessions. Usiminas (USIM5.SA) dipped 1.77 percent to 55.60 reais, Gerdau (GGBR4.SA) fell 0.72 percent to 27.40 reais and CSN (CSNA3.SA) edged down 0.06 percent to 68.15 reais.

Mining company Vale (VALE5.SA), the world's largest producer of iron ore, moved down 0.58 percent to 46.41 reais. Vale, along with other major iron ore miners, is seeking price hikes in negotiations with Asian steel mills. [ID:nSGE62B0DU]

Changes in yields on Brazilian interest rate futures contracts <0#DIJ:> were mixed but undramatic.

The yield on the contract due January 2011 DIJF1 edged down to 10.51 percent from 10.52 percent. The yield on the contract due April 2010 DIJJ0 ticked to 8.805 percent from 8.815 percent.

Central bank policymakers meet next week to consider changes to the country's benchmark interest rate, the Selic, currently at a record low 8.75 percent.

Analysts in a Reuters poll were largely divided over a rate hike in March or in April. [ID:nSPG002795] (Reporting by Luciana Lopez; Editing by Dan Grebler)