* U.S. stocks rise on better-than-expected retail sales
* Gold hits 6-month high as investors await U.S. payrolls
* Oil steady at $68 a barrel on mixed economic outlook
* Yen retreats from 7-week highs; ECB weighs on euro
(Updates with U.S. markets activity, changes dateline;
previous LONDON)
By Herbert Lash
NEW YORK, Sept 3 (Reuters) - U.S. stocks and oil prices
inched higher on Thursday after better-than-expected-sales from
key U.S. retailers in August spurred optimism, but gold futures
also rose in a sign of lingering risk aversion.
The yen fell from a seven-week high against the U.S. dollar
and declined versus other major currencies as a bearish tone
earlier this week in world stock markets eased and reduced the
Japanese currency's safe-haven allure. []
U.S. government debt prices fell, pulling benchmark yields
back from seven-week lows, on hints of stock market stability
and nervousness ahead of a key U.S. employment report on
Friday. []
Demand by jittery investors for asset diversification in
gold and other precious metals on top of still shaky equity
markets propelled a rally in gold to almost $1,000 an ounce.
[]
Fears among some investors that the U.S. payrolls data on
Friday may disappoint sparked a flight to quality this week.
But retail sales data lifted U.S. stock prices despite
higher-than-forecast initial claims for jobless benefits and
survey results showing the U.S. nonmanufacturing sector was
still contracting in August.
August retail sales in the United States on average fell
2.9 percent from a year earlier, according to Thomson Reuters.
That was better than the 3.8 percent decline analysts expected
and the best performance since April. []
The Standard & Poor's retail index <.RLX> for stocks was up
1.3 percent after 1 p.m.
Oil also rose on hopes for upbeat jobs data on Friday.
"We are just going to be treading water, at least until
tomorrow when the more important number comes out, and we could
see a bit of a surprise... not as bad as people are thinking,"
said commodities analyst Edward Meir at MF Global in New York.
Shortly after 1 p.m., the Dow Jones industrial average
<> was up 22.60 points, or 0.24 percent, at 9,303.27. The
Standard & Poor's 500 Index <.SPX> was up 3.35 points, or 0.34
percent, at 998.10. The Nasdaq Composite Index <> was up
6.72 points, or 0.34 percent, at 1,973.79.
U.S. crude prices <CLc1> for October delivery rose 33 cents
to $68.38 a barrel. London Brent cruce <LCOc1> rose 4 cents at
$67.70 a barrel.
European shares ended lower for a fourth consecutive
session on Thursday, with weaker energy and pharmaceutical
stocks outpacing gains made by financial and mining equities.
[]
The FTSEurofirst 300 <> index of top European shares
closed 0.06 percent lower at 949.82 points.
Shorter-dated euro zone bond yields fell to a six-month low
after European Central Bank President Jean-Claude Trichet
encouraged expectations that rates will stay low after the ECB
kept interest rates unchanged at a record low 1.0 percent.
[]
New applications for U.S. jobless benefits fell last week,
while activity in the services sector was at its strongest in
nearly a year in August, suggesting a modest recovery from
recession was underway. []
U.S. gold contract for December delivery <GCZ9> was up
$16.40 at $994.90 an ounce.
The dollar rose 0.4 percent to 92.57 yen <JPY=> after
falling as low as 91.92 yen <JPY=>, according to Reuters data,
its lowest since July 13.
The euro rose 0.1 percent to $1.4275 <EUR=>, off a session
peak of $1.4348.
The 30-year bond <US10YT=RR> was down 4/32 in price to
yield 3.32 percent.
Asian shares rose as a surge in the volatile Shanghai
market helped underpin indexes around the region, lifting the
MSCI index of Asia shares traded outside Japan 0.8 percent
<.MIAPJ0000PUS>. Japan's Nikkei share average <> fell 0.6
percent.
(Reporting by Edward Krudy, Wanfeng Zhou, Rebekah Kebede and
Burton Frierson in New York; Atul Prakash and Jessica Mortimer
in London; writing by Herbert Lash, Editing by Chizu Nomiyama)
