| NEW YORK
NEW YORK World stocks scratched out gains on Wednesday after a forecast from U.S. retailer Target Corp aided the consumer outlook in a field of tepid earnings, while energy shares fell as crude oil prices were pressured by a disappointing industry report.
The euro fell, surrendering early gains against the dollar after a German government bond auction attracted solid demand, easing concern about fiscal instability in the European Union.
Oil prices pared losses after a government report showed U.S. crude stocks last week fell less than analysts had expected. That report undercut some of the pressure on prices after the American Petroleum Institute late on Tuesday showed a rise in crude stocks last week.
Wall Street managed to build on Tuesday's rally of more than 1 percent as investors grappling with the direction of the economy assessed the latest corporate earnings.
Retailers were again in focus. Target (TGT.N) reported weak same-store sales but its shares recovered after the company said it sees third-quarter same-store sales rising by 1 to 3 percent.
Declining energy shares and lackluster earnings kept gains in check. The S&P 500 index was also trading around its 50-day moving average, struggling to break it decisively. The 50-day average is currently around 1,088.
The inability to push through that level with conviction is illustrative of an unenthusiastic market as investors reassess their outlook on the economy, said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia, Pennsylvania.
"You don't have the energy to push it through and that might take a little while," Brunner said.
The Dow Jones industrial average .DJI rose 9.69 points, or 0.09 percent, to 10,415.54. The Standard & Poor's 500 Index .SPX edged higher by 1.62 points to 1,094.16 and the Nasdaq Composite Index .IXIC climbed 6.26 points to 2,215.70.
Also on Wednesday, warehouse club operator BJ's Wholesale Club Inc BJ.N missed profit expectations, sending its shares down 2.7 percent at $42.14. Target (TGT.N) gained 2.5 percent to $51.95.
With consumer spending typically accounting for about two-thirds of U.S. economic activity, retailers have come under heavy scrutiny by investors.
In other earnings, Deere & Co (DE.N), the maker of construction, forestry and agricultural equipment, beat estimates, but said sales were "far below normal levels" and pointed to deteriorating conditions in Europe. Deere lost 1.9 percent to $65.98.
Shares of global miner BHP Billiton (BHP.AX)(BLT.L) remained in focus, falling more than 3.4 percent in London on concerns that it may have to overpay for fertilizer group Potash Corp after the Canadian firm rejected an initial takeover offer.
In Europe the pan-European FTSEurofirst 300 .FTEU3 closed down 0.4 percent, pressured by energy stocks.
U.S. crude for September delivery fell 50 cents to $75.27 a barrel. Oil is down around 4 percent this month.
World shares as measured by MSCI .MIWD00000PUS and Thomson Reuters .TRXFLDGLPU eked out gains of less than 0.1 percent. Japan's Nikkei .N225 closed up about 0.9 percent.
Traders warned against reading too much into market moves at the moment.
"The market is still rangebound. There is no conviction at the moment, and this will go on until September when investors come back from holiday," said Alexandre Le Drogoff, technical analyst at Aurel BGC in Paris.
The dollar endured selling pressure against the yen, easing toward recent 15-year lows on growing speculation that Japanese authorities are unlikely to intervene to counter their currency's recent strong run.
The euro recovered from the day's low after a 5 billion euro sale of German 10-year debt produced a record-low average yield of 2.37 percent, but failed to hold above key levels.
The euro declined 0.18 percent at $1.2856.
"There is currently not enough fundamentally positive news out of Europe to drive the euro beyond 1.2900 on a sustained basis," said Joseph Trevisani, chief analyst at FX Solutions in Saddle River, New Jersey.
The dollar shed 0.16 percent against the yen to 85.39 yen, not far from a 15-year low of 84.72 yen hit on trading platform EBS last week.
U.S. Treasury bond prices dipped as equities rose.
In light of Wednesday's modest pullback, investors and analysts are divided whether the summer rally in bonds is coming to end.
Statistical measures such as relative strength index signaled Treasuries remain overbought.
"I view the great bull market in bonds to be approaching a speculative blow-off, and I am increasingly of the view that shorting the U.S. bond market will be the trade of the decade," wrote Doug Kass, a fund manager at Seabreeze Partners in Palm Beach, Florida, in a note to clients.
But there is little evidence that investors are willing to trim their bond holdings any time soon as the economic recovery appears vulnerable, some analysts said.
The benchmark 10-year Treasury note last traded down 1/32 to 99-25/32, near its session low. Its yield was last 2.64 percent, flat from late on Tuesday and below a 17-month low of 2.56 percent set two days ago.
The 30-year bond bucked the downtrend to rise 18/32 in price to yield 3.74 percent after touching a 16-month mow of 3.68 percent earlier.
Gold rose $6.24, or 0.51 percent, to $1,229.10.
(Additional reporting by Blaise Robinson and Anirban Nag in London, and Edward Krudy, Leah Schnurr and Nick Olivari in New York, and Brad Dorfman in Chicago; Editing by Leslie Adler)