GLOBAL MARKETS-Stocks slip after new Japan earthquake

                                
 * ECB raises rates, euro weaker
                                
 * Stocks slip after second earthquake in Japan
                                
 * Gold, corn hit record highs before backing off
 (Adds details, quote)
                                
 By Leah Schnurr
                                
 NEW YORK, April 7 (Reuters) - Stocks on major world markets
slipped after a second earthquake rocked Japan on Thursday,
while the euro retreated against the U.S. dollar after the
European Central Bank raised interest rates but signaled it was
not necessarily the start of a round of hikes.
                                
 U.S. and European stocks ended lower after an earthquake
measuring 7.4 shook northeast and eastern Japan. A tsunami
warning was issued for the northeastern coast but later lifted.
For details, see [ID:nL3E7F72Y2]
                                
 However, Wall Street stocks ended off their lows for the
day as better-than-expected sales reported by major retailers
and good weekly jobs data boosted optimism for a sustained
economic recovery.
                                
 European stocks ended down 0.2 percent and the S&P 500
finished down 0.15 percent. U.S.-dollar denominated Nikkei
futures <NKc1> were down 1.6 percent. Japan is the world's
third-largest economy and investors feared the new quake could
harm the global recovery with some manufacturers' supplies from
Japan already interrupted.
                                
 "It got people thinking that maybe this is not finished
yet, and this is of a bigger scale than what we had expected,"
said Jack DeGan, chief investment officer at Harbor Advisory
Corp in Portsmouth, New Hampshire.
                                
 European shares had earlier gained after Portugal's request
for European aid fostered hopes the region's debt crisis may be
closer to an end. The pan-European European FTSEurofirst 300
stock index <.FTEU3> was down 0.2 percent. Portugal's stock
market bucked the trend, with the PSI 20 <.PSI20> index up 1.2
percent.
                                
 The Dow Jones industrial average <.DJI> slipped 17.26
points, or 0.14 percent, to 12,409.49. The Standard & Poor's
500 Index <.SPX> lost 2.03 points, or 0.15 percent, to
1,333.51. The Nasdaq Composite Index <.IXIC> eased 3.68 points,
or 0.13 percent, to 2,796.14.
                                
 World stocks as measured by MSCI <.MIWD00000PUS> were off
0.3 percent.
                                
 "CLOSE TO THE VEST"
                                
 The ECB raised its benchmark interest rate by a quarter
percentage point to 1.25 percent to counter rising inflation.
But ECB President Jean-Claude Trichet said it was not
necessarily the start of a series of rate hikes, disappointing
some who had expected a more hawkish tone. [ID:nLDE7351QH]
                                
 The euro <EUR=> was last down 0.3 percent at $1.4292, off a
more than 14-month high of $1.4350 touched on Wednesday.
                                
 Spot gold <XAU=> hit a new record at $1,464.80 an ounce
following Trichet's comments before easing back to trade
slightly higher.
                                
 "His tone is decidedly neutral right now. He's keeping
things very close to his vest," said Boris Schlossberg,
director of research at GFT in New York, referring to Trichet's
comments. "The euro trade has been so focused on interest rate
differentials, so some of the fast money might come out of the
trade."
                                
 It was the first rate increase since 2008 and followed 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 its banking system.
                                
 Portugal said it will make the formal request for aid later
on Thursday. The rescue package could reach 85 billion euros
($122 billion). [ID:nLDE7361H1]
                                
 Spain vowed it would not follow Portugal in seeking a
bailout. A successful Spanish bond auction suggested markets do
not fear contagion at the moment. [ID:nLDE7360Y7]
                                
 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 and retail stocks rose. [ID:nN0784911]
[ID:nN07294366]
                                
 Among commodities, spot gold was up 0.1 percent in late
trade after hitting a new peak. Chicago corn futures <Cc1>
reached a fresh all-time high at $7.73-1/4 before ending lower
ahead of the USDA's April supply/demand report early on Friday.
                                
 Oil prices ended at 2-1/2-year highs as supply worries due
geopolitical turmoil overshadowed demand concerns. U.S. May
crude futures <CLc1> closed up $1.47 at $110.30 a barrel, the
best since Sept. 22, 2008.
                                
 (Additional reporting by Angela Moon and Wanfeng Zhou)