GLOBAL MARKETS-Stocks rebound on upbeat U.S. data; euro falls

Mon Apr 14, 2014 12:05pm EDT

* U.S. retail sales data indicates economy recovering
    * Worries on Ukraine boost prices of gold, oil
    * Euro undermined by ECB officials' talk of more easing
    * Japan's Nikkei marks six-month closing low

 (Updates market action, adds quote, changes byline; dateline
previously LONDON)
    By Richard Leong
    NEW YORK, April 14 (Reuters) - Global equities rose on
Monday as robust U.S. retail sales data signaled economic
growth, while the euro fell after the European Central Bank gave
its strongest signal yet that it would ease policy to cool the
single currency.
    The encouraging retail sales from the world's biggest
economy, which had been bogged down by a harsh winter, overrode
fears of a military conflict in Ukraine that had punished stock
prices earlier. 
    Ukraine's president threatened military action after
pro-Russian separatists occupying government buildings in the
east ignored an ultimatum to leave and another group of rebels
attacked a police headquarters in the region. The flare-up came
less than a month after Russia completed its annexation of
Ukraine's southern Crimea peninsula. 
   But the data showing that U.S. retail sales jumped 1.1
percent in March, the biggest monthly rise in 1-1/2 years, drew
investors back into riskier investments. The bounce back in
equities followed a sharp sell-off last week. 
    "This is the first report that activity is bouncing back
from the winter weather," said Craig Dismuke, chief economic
strategist at Vining Sparks in Memphis, Tennessee. "This should
set the foundation for stocks to go up a bit and bond yields to
go higher."
    On Wall Street, the Dow Jones industrial average rose
76.49 points, or 0.48 percent, to 16,103.24, the S&P 500 
gained 9.54 points, or 0.53 percent, to 1,825.23, and the Nasdaq
Composite added 16.438 points, or 0.41 percent, to
4,016.172.
    Financial stocks were among the largest gainers after Citi
 said its quarterly net profit rose as a smaller loss on
its troubled assets offset lower revenue and profit from its
core trading and lending businesses. Citi shares jumped 4.2
percent to $47.62. 
    The MSCI world equity index, which tracks
shares in 45 nations, rose 0.3 percent at 405.45 points, erasing
an earlier loss of 0.3 percent.
    The pan European FTSEurofirst 300 was 0.4 percent
higher at 1,318.58, also erasing earlier losses. The index shed
2.9 percent last week. 
    Earlier, Japan's Nikkei stock average ended down 0.4
percent at a six-month closing low. It plunged 7.3 percent last
week, the biggest weekly fall since the devastating earthquake
and tsunami in March 2011.
    But Russian shares tumbled 1.3 percent and the rouble
fell 0.8 percent to its weakest level against the dollar 
in nearly three weeks as the tensions in Ukraine
weighed. 
    European Union foreign ministers were to hold talks later on
Monday about tougher sanctions against Russia. 
The worry for many is that the two sides end up imposing
increasingly tough measures that will inevitably harm both.     
    "The escalation sharply increases risks of an all-out civil
war in Ukraine," Bank of America Merrill Lynch analysts said in
a research note.  
    The stabilization in stock prices led some traders to pare
their holdings in less risky U.S. and German government bonds.
    Benchmark 10-year Treasuries notes were 7/32
lower in price with a yield of 2.645 percent, and German Bund
futures fell 19 basis points to 143.89.  
             
  
    EURO FALLS
    More promises from the ECB over the weekend that it will
take action to head off further gains in the euro pulled the
euro back to $1.3821, down 0.45 percent from Friday's high of
$1.3905. 
    Against the yen, the euro fell 0.3 percent to 140.70 yen
, near the low end of its trading range since early
March.    
    "The strengthening of the exchange rate would require
further monetary policy accommodation," ECB head Mario Draghi
said at a weekend meeting of the International Monetary Fund.
 
    Benoit Coeure, another top ECB member, also laid out some
asset-buying options, a tactic which appears to be finally
gaining traction at the central bank. 
    The ECB "is taking the value of the euro more seriously in
their approach to monetary policy," said Thierry Albert Wizman,
global interest rates and currencies strategist at Macquarie Ltd
in New York.    
    The dollar gained against most major currencies on the
strong March retail sales report. It nudged up nearly 0.2
percent to 101.80 yen after touching a 3-1/2-week low of
101.32 yen on Friday, though that was far from the 2-1/2-month
high of 104.13 yen set on April 4.
    Among commodities, spot gold benefited from the move
toward safe-haven assets on the worries over Ukraine, adding 0.7
percent to $1,327.10 an ounce, after earlier marking a
three-week high. 
    Oil prices were also underpinned by fears that the tension
between Russia and Ukraine could escalate. Ukraine is a major
supply route for Russian gas to Europe. 
    Brent crude for May delivery was last up 70 cents,
or 0.65 percent, at $108.03 a barrel. U.S. crude was last
up 12 cents, or 0.12 percent, at $103.86 per barrel. 

 (Additional reporting by Sam Forgione in New York, Marc Jones
and Marius Zaharia in London, Megan Davies in Moscow; Editing by
Leslie Adler)