GLOBAL MARKETS-Asian stocks pare gains after initial Intel boost

                                
 * Technology stocks get boost from Intel earnings, outlook
                                
 * Nikkei hits a 15-month high, retraces gains
                                
 * Tepid U.S. retail and unemployment data weighs
                                
 By Umesh Desai
                                
 HONG KONG, Jan 15 (Reuters) - Most Asian stocks gave up
early gains on Friday as weak U.S. retail sales and a rise in
jobless claims made investors wary about the strength of its
economic recovery, offsetting better-than-expected earnings
from technology bellwether Intel.
                                
 The weak U.S. economic data boosted Treasuries and provided
a lead for government bonds in Japan and South Korea as
investors bet U.S. interest rates will be kept very low for a
prolonged period to give the economy time to get on more solid
footing.
                                
 Japan's Nikkei average <.N225> briefly hit a 15-month high
before weaving in and out of negative territory amid investor
caution that the bechmark had risen too sharply in a short span
of time.
                                
 But tech-heavy markets like Taiwan <.TWII> and South Korea
<.KS11> clung more strongly to initial gains after Intel's
<INTC.O> earnings pointed to firm demand for PCs and other
gadgets using memory chips, even if overall U.S. consumer
spending unexpected fell in December. [ID:nN13151343]
                                
 Mark Konyn, who oversees about $11 billion as Asia-Pacific
chief executive of RCM, a unit of Allianz Global Investors,
said the improved earnings were a result of corporate demand
carried over from past years.
                                
 "What we are seeing in technology is continued momentum
partly as a result of deferred capex spending over the last
almost two years now slowly coming through and that will
probably continue for a bit longer now," he said.
                                
 Intel's 28 percent increase in fourth-quarter revenue plus
a financial forecast well ahead of Wall Street's expectations
came on a day when U.S. retail sales and weekly jobless claims
data disappointed and ultimately proved a drag on Wall Street,
with  major indexes ending the day only marginally higher.
[.N.]
                                
 The Commerce Department said retail sales fell 0.3 percent
last month, the first decline since September, as consumers
spent less during the holiday shopping month. [ID:nN14168822]
                                
 A separate report from the Labor Department showed initial
claims for state unemployment benefits rose 11,000 to 444,000
last week, higher than the 437,000 claims analysts surveyed by
Reuters had forecast.
                                
 Geoff Lewis, head of investment services at JP Morgan Asset
Mangement, said although corporate earnings had improved, they
needed to be bolstered by good economic data.
                                
 "Everyone is talking of this transition from the initial
phase of the business cycle where you have PE (price/earnings)
re-ratings based on the economic indicators to an earnings-led
phase, we don't disagree with that," he said.
                                
 "But you still have to see continued good news on the
economic front to validate improvements in corporate earnings
forecasts."
                                
 The Intel results also fuelled demand for currencies
leveraged to global growth, like the Australian <AUD=D4> and
Canadian dollars <CAD=>. But the U.S. dollar <.DXY> and yen
<JPY=> later reversed their losses as investors pared risk amid
the uncertain economic outlook.
                                
 Overnight, the Australian dollar briefly rose to $0.9331,
its highest since mid-November.
                                
 Japanese government bonds also rose after the U.S. economic
data boosted U.S. Treasuries, but gains were capped as the
firmness in Tokyo shares made investors hesitant.
                                
 The MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> was trading flat after rising as much as 0.25
percent. The index of technology shares was up 1.03 percent.
                                
 The Thomson Reuters index of regional shares <.TRXFLDAXPU>
was down 0.5 percent.
                                
 Japan's Nikkei average rose to its highest since October
2008 with data showing flows into Japan equity funds hit a near
3-year high. The MSCI Japan index has risen over 6 percent on
the year compared with 2.6 percent for the MSCI Asia Pacific
ex-Japan index, but analysts say this is to be expected.
                                
 "It would not be surprising when there will be brief
periods when Japan will outperform, it has done so badly in the
past. It is difficult to become enthiusiastic over that
market," said Lewis, whose fund is neutral on Japan.
                                
 Oil <CLc1> fell below $79 a barrel and was set for its
first weekly drop in more than a month, as the disappointing
economic data added to expectations for reduced heating demand
in the United States.
 (Editing by Kim Coghill)