* Blowout Goldman Sachs results buoy investor sentiment
* Yen, dollar struggle amid modest rise in risk appetite
* U.S. crude oil slips on worries demand will slow more
* Bond prices fall on profit-taking after recent rally
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, July 14 (Reuters) - Global shares eked out gains
on Tuesday after blowout results at Goldman Sachs boosted hope
corporate earnings for the second quarter will prove strong,
but oil prices fell on troubling signs of weak demand.
The yen fell and the U.S. dollar struggled against most
major currencies as Goldman's earnings and U.S. retail sales in
June surpassed expectations, stoking hopes for economic
recovery and reducing flows into the dollar driven by risk
aversion.
But traders were cautious before the release of earnings
from other U.S. banks this week, while lackluster sentiment
data from Germany weighed on the euro.
The 30-year U.S. Treasury bond traded more than two points
lower in price as a sell-off in government debt markets
deepened on profit-taking from a monthlong rally.
Profits at Goldman Sachs Group Inc <GS.N> surged 33 percent
as trading results nearly doubled, trouncing expectations and
putting the bank on pace for windfall bonuses that could draw
more unwanted public scrutiny. See []
But analysts said much of the day's news, including
Goldman's profits, was already accounted for after optimism
that banks' earnings will be stronger than anticipated lifted
the major U.S. stock indexes more than 2.0 percent on Monday.
Investors were also cautious with other major companies set
to post results later this week, including Bank of America
<BAC.N> and General Electric <GE.N>, and as doubts persisted
about the economy.
Much of a 0.6 percent gain in U.S. retail sales was driven
by higher gas prices, suggesting consumers remained wary of
stepping up discretionary spending. Retail sales registered a
fourth consecutive monthly decline. [].
A rebound in sales is considered vital for the U.S. economy
to bounce back from recession, as consumer spending accounts
for roughly two-thirds of the country's economic activity.
"The consumer remains extremely weak and that's the biggest
headwind we face, in terms of the economy picking up steam,"
said Michael Sheldon, chief market strategist at RDM Financial
in Westport, Connecticut.
"As a result, investors face a large amount of uncertainty
over the near term as to the next direction for the market."
Intel <INTC.O> is expected after the closing bell on
Tuesday.
The Dow Jones industrial average <> closed up 27.81
points, or 0.33 percent, at 8,359.49. The Standard & Poor's 500
Index <.SPX> rose 4.79 points, or 0.53 percent, at 905.84. The
Nasdaq Composite Index <> added 6.52 points, or 0.36
percent, at 1,799.73.
Banking shares led European stocks higher, with the
FTSEurofirst 300 <> index of top European shares closing
up 1.2 percent at 840.15 points. []
A slight rise in risk appetite supported higher-yielding
currencies and those tied to commodities, such as Canada's
dollar <CAD=>, which hit a three-week high against the
greenback.
The U.S. dollar and yen tend to fall when risk appetite
rises as investors target higher-yielding currencies and assets
such as stocks and commodities.
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.03 percent at 80.147.
The euro <EUR=> was down 0.24 percent at $1.3943, while
against the yen, the dollar <JPY=> was up 0.38 percent at
93.32.
A recent rally in U.S. Treasuries may have run its course
after benchmark yields, which move inversely to prices, have
fallen to a seven-week low of 3.26 on Monday from 4.00 percent
in early June, analysts said.
"We had a nice run in June, we moved a long way in fairly
short order, and that is usually a prescription for profit
taking in overbought conditions," said David Coard, head of
fixed-income sales and trading at The Williams Capital Group in
New York.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 25/32 in price to yield 3.45 percent. The 2-year U.S.
Treasury note <US2YT=RR> was down 3/32 in price to yield 0.94
percent.
U.S. crude fell 17 cents to settle at $59.52 a barrel,
extending a decline that shaved 11 percent from the price last
week. London Brent crude rose 17 cents to $60.86 a barrel.
The loss came after data showed disappointing U.S. consumer
spending alongside a larger-than-expected increase in producer
prices -- a reflection of inflation.
In a sign of soft demand in the United States, the world's
leading energy user, Mastercard SpendingPulse said gasoline
consumption over the peak travel July 4 holiday was 4.3 percent
lower than a year ago.
New York gold futures ended a tad higher as
greater-than-expected increase in U.S. producer prices and
retail sales in June boosted bullion's appeal as an inflation
hedge.
Gold futures for August delivery <GCQ9> settled up 30 cents
at $922.80 an ounce in New York.
Asian stocks gained, as a rally in U.S. financial shares
helped Japan snap a losing streak. Japan's Nikkei average
<> rose 2.3 percent, while MSCI's index of stocks
elsewhere in the Asia-Pacific <.MIAPJ0000PUS> rose 3.4
percent.
(Reporting by Rodrigo Campos, Ellen Freilich, Steven C.
Johnson in New York; George Matlock, Brian Gorman and Emma
Farge in London; writing by Herbert Lash; Editing by Leslie
Adler)
