* Wall St rises on better-than-expected Dec. retail sales
* World equity markets rise despite concerns about future
* 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 gain 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.
The retail sales data was the first major economic indicator
since Friday's labor market report for December, which showed
job growth that was sharply below expectations.
"The retail sales are painting a better economic backdrop
than payrolls did, and investors are using recent weakness as an
opportunity to buy," said Mike Gibbs, co-head of the equity
advisory group at Raymond James in Memphis, Tennessee.
A stronger U.S. economy could lead the Federal Reserve to
quicken the pace of dialing back its stimulus, a move equity
markets have generally disliked. The stimulus was considered a
major driver of a 29.6 percent gain in the S&P 500 last year.
The gains have driven the forward price-to-earnings ratio
for the benchmark index to the highest level in nearly seven
years, a reason for its biggest sell-off in two months on
On Tuesday, both JPMorgan Chase & Co and Wells Fargo
& Co posted quarterly results that beat expectations,
yet gains in their stock prices were limited, with Wells near
all-time highs and JPMorgan at its highest since 2000. JPMorgan
rose 0.07 percent to $57.74, while Wells slipped 0.2 percent to
$45.48. The S&P financial index advanced 0.63
"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," said
Brad McMillan, chief investment officer for Commonwealth
Financial in Waltham, Massachusetts.
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, rose 0.23 percent, rebounding
from early losses.
On Wall Street, the Dow Jones industrial average was
up 110.45 points, or 0.68 percent, at 16,368.39. The Standard &
Poor's 500 Index was up 19.57 points, or 1.08 percent, at
1,838.77. The Nasdaq Composite Index was up 69.36
points, or 1.69 percent, at 4,182.66.
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 Spanish 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 1.17 percent at 104.18 yen, and the dollar
index edged up 0.13 percent at 80.620. The euro rose 0.06
percent to $1.3679.
U.S. oil rose as traders squared positions amid signs of
strength in the U.S. economy, while Brent fell as incremental
increases in Libyan oil supply and expectations that Iranian
crude will return to market weighed on prices.
The February Brent crude contract, which expires on
Thursday, settled down 36 cents at $106.39 a barrel. U.S. crude
settled at $92.59, up 79 cents a barrel.