* 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 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
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
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,"
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
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.