* European stocks rise on EU bailout for Portugal
* ECB raises rates, euro weaker
* Wall Street opens higher on jobs, sales data
(Recasts, updates to Wall Street open, adds details, quote,
changes byline, dateline, previous LONDON)
By Leah Schnurr
NEW YORK, April 7 (Reuters) - The euro fell against the
dollar on Thursday after the European Central Bank raised rates
but signaled it was not necessarily the start of a round of
hikes, while European shares rose on hopes the region's debt
crisis will be stanched.
The ECB raised rates by 25 basis points to 1.25 percent to
counter firming inflation pressures. ECB President Jean-Claude
Trichet said it was not necessarily the start of a series of
similar steps, disappointing some who had expected a more
hawkish tone. For details, see []
"This makes the ECB the first major developed economy
central bank to hike rates, and the decision will cement its
reputation as a single-minded inflation fighter," said ABN Amro
economist Nick Kounis.
"The hike is unwelcome for peripheral countries, but
arguably the core member states were in need of this move
already some time ago. In that sense, the timing of the
increase is a balancing act, which is part and parcel of the
one-size-fits-all monetary policy," he added.
The euro was down 0.5 percent at $1.4255 <EUR=>, off a more
than 14-month high of $1.4350 touched on Wednesday.
It was the first rise since July 2008 and came a day after
Portugal's caretaker government requested European Union aid at
the urging of leading bankers. They wanted a bailout to help
the economy and safeguard the country's banking system.
Portugal said it will make the formal request for aid later
on Thursday. Lisbon has not yet said how much it will need.
[]
The pan-European European FTSEurofirst 300 stock index
<> was up 0.3 percent, led higher by banks as investors
bet higher interest rates would not derail strength in
equities.
Further contagion in the debt crisis was not being ruled
out, but other countries that have been struggling, notably
Spain, are less likely to be drawn in.
Wall Street opened modestly higher after positive labor
market and same-store sales data brightened the outlook for
consumer spending, a key component of the economic recovery.
"There is an extreme level of bullishness, so there is an
argument to make that the boat is already full," said Peter
Boockvar, equity strategist at Miller Tabak & Co in New York.
"The market is dealing with a lot of uncertainty near the
highs; either we break through or we fail, and when you get
that situation we see this kind of hesitancy."
World stocks as measured by MSCI <.MIWD00000PUS> were weak,
dipping 0.1 percent, and emerging markets <.MSCIEF> took a step
back from a sharp rally of the past few weeks to trade flat.
Japan's Nikkei <> closed up 0.1 percent.
The Dow Jones industrial average <> edged up 7.38
points, or 0.06 percent, at 12,434.13. The Standard & Poor's
500 Index <.SPX> added 2.85 points, or 0.21 percent, to
1,338.39. The Nasdaq Composite Index <> rose 12.81 points,
or 0.46 percent, to 2,812.63.
Investors got more signs of a firming labor market as new
U.S. claims for unemployment benefits fell slightly more than
expected last week. Other data showed March was not as bad as
expected for many U.S. retailers even in the face of higher
gasoline prices. [] []
Among commodities, spot gold <XAU=> held near Wednesday's
record high, while Chicago corn futures <Cc1> reached a fresh
all-time high on inventory concerns.
(Additional reporting by Rodrigo Campos and Nick Olivari in
New York, Lucia Mutikani in Washington, Paul Carrel in
Frankfurt; Editing by Padraic Cassidy)
