* European shares, euro dip to add to recent falls
* Russian troop build-up, sanctions check risk appetite
* Investors seek shelter in safe-haven bonds, gold
* Portugal's woes continue
* Wall Street up after claims data
(Adds U.S. markets open, quote; changes dateline; previous
By Chuck Mikolajczak
NEW YORK, Aug 7 European shares and the euro
fell on Thursday and investors retreated to safe-haven
government debt after a stronger-than-expected move by Russia to
ban certain imports from Europe and the United States.
Wall Street was higher in early trading after
better-than-expected figures on weekly jobless claims. More
broadly, MSCI's world equity index slipped 0.2
German government debt yields fell to all-time lows, on
increased concern over the effect Ukraine's crisis will have on
euro zone growth. The European Central Bank said following its
monthly policy-setting meeting that a sanctions war could worsen
the growth outlook on the continent, where demand is already
The ECB elected to hold borrowing rates at record low levels
on Thursday. Europe's main bourses were lower, with London's
down 0.4 percent, Germany's DAX off 0.8 percent
and France's CAC 40 down 1.2 percent.
"Geopolitical risks are heightened, are higher than they
were a few months ago. And some of them, like the situation in
Ukraine and Russia will have a greater impact on the euro area
than they ... have on other parts of the world," said ECB head
Mario Draghi, in post-meeting comments.
Russia said on Wednesday it would ban all food imports from
the United States and all fruit and vegetables from Europe in a
stronger-than-expected answer to Western sanctions for Moscow's
support for separatists in Ukraine.
German Bunds slid to a record low of 1.079 percent
while the 10-year UK gilts yield touched a one-year
low of 2.493 percent.
Gold climbed back above $1,300 an ounce to $1,305 and
10-year U.S. bond yields touched near a two-month low at 2.45
The tensions have, however, aided the ECB's efforts to push
down the euro. The shared currency was hovering just above a
nine-month low against the dollar at $1.3343.
Portuguese stocks, down 1.4 percent, and bonds
were again showing significant weakness amid
worries the country and its banks will have to pay dearly for
the rescue of Banco Espirito Santo.
U.S. stocks were able to advance modestly despite the
unexpectedly wide sanctions, as an unexpected drop in jobless
claims added to evidence the world's largest economy is gaining
The Dow Jones industrial average rose 34.78 points or
0.21 percent, to 16,478.12, the S&P 500 gained 5.02
points or 0.26 percent, to 1,925.26 and the Nasdaq Composite
added 18.67 points or 0.43 percent, to 4,373.72.
The United States "can sustain not trading with Russia a lot
longer than anybody else, that's why the market is not worried
about that," said Matt Kaufler, portfolio manager at Federated
Investors in Rochester, New York.
He said, however, it's "not the broadening of the sanctions,
but the (potential) broadening of the military conflict" which
could hurt markets.
As fighting has intensified on the ground in eastern
Ukraine, NATO said Moscow had massed around 20,000 combat-ready
troops on the Ukrainian border and warned of a possible advance.
Russia's dollar-denominated RTS index, which is down
nearly 10 percent over the past three weeks, lost 0.5 percent
while its rouble-based peer MICEX shed 0.3 percent,
giving its a 6.5 percent decline over the same period.
U.S. crude was down 15 cents to $96.78 while Brent
crept closer to the $105 mark, up 7 cents at $104.66 per
(Additional reporting by Rodrigo Campos; Editing by Nick