GLOBAL MARKETS-Stocks rise, government debt falls after U.S. data
* Wall St rises on better-than-expected Dec. retail sales
* World equities flat on concerns about future earnings
* Euro rises for 4th day vs dollar; greenback gains vs yen
By Herbert Lash
NEW YORK, Jan 14 (Reuters) - Global equity markets rose and U.S. Treasury prices fell on Tuesday after a gauge of U.S. consumer spending rose more than expected in December, a sign the world's largest economy is poised for stronger growth this year.
The U.S. Commerce Department said retail sales - excluding automobiles, gasoline, building materials and food services - increased 0.7 percent last month after a 0.2 percent rise in November.
Economists polled by Reuters had expected core retail sales to rise 0.3 percent in December. The increase suggested consumer spending accelerated in the fourth quarter, the latest sign of strong U.S. economic momentum at the end of last year.
"It's conducive to the growth story that is becoming increasing popular," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
However, a stronger U.S. economy could lead the Federal Reserve to quicken the pace of dialing back its economic stimulus, a move equity markets have generally disliked.
"From an economic perspective, the real economy continues to gain traction, but from a market perspective the stronger the economy looks, the more we need to look and see whether in fact the Fed might be pulling back sooner than people think," McMillan said.
The pan-European FTSEurofirst 300 index of leading regional shares closed up 0.15 percent at 1,326.37, while the broader MSCI all-country world index, which tracks shares in 45 countries, was up 0.23 percent after rebounding from earlier losses.
On Wall Street, the Dow Jones industrial average rose 86.98 points, or 0.53 percent, at 16,344.92. The Standard & Poor's 500 Index was up 17.13 points, or 0.94 percent, at 1,836.33. The Nasdaq Composite Index was up 62.12 points, or 1.51 percent, at 4,175.43.
As the Fed withdraws its stimulus, considered a major driver of a 29.6 percent gain in the S&P 500 last year, investors are expected to be more selective about stock valuations. The forward price-to-earnings ratio for the index is the highest in nearly seven years, a motive behind its biggest sell-off in two months on Monday.
U.S. Treasuries prices fell. Benchmark 10-year notes were last down 12/32 in price to yield 2.869 percent, up from 2.825 percent late Monday.
German Bund futures settled up 3 ticks at 140.68 euros. Spanish government bond yields dipped to 3.83 percent as data showing the economy grew at its fastest pace since 2008 in last year's fourth quarter supported demand before debt sales later this week.
The dollar gained against the yen, but traded near break-even against the euro and the dollar index.
The dollar was up 0.87 percent at 103.88 yen, and the dollar index edged up 0.07 percent at 80.569. The euro rose 0.08 percent to 1.3682.
Brent crude oil edged down toward $106 a barrel as Libyan supply picked up and a restart of Iranian oil shipments appeared closer.
Recent weak U.S. economic data has also dampened the outlook for fuel demand in the world's largest oil consumer.
The February Brent crude contract, which expires on Thursday, was down 37 cents at $106.38 a barrel. U.S. crude was at $92.79, up 99 cents a barrel.
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