* Dollar up vs euro on fears of mounting euro zone bills
* Euro zone peripheral spreads widen
* Stocks dip on weak retail, energy shares
* European shares close at 28-month high
(Updates with quote, data)
By Manuela Badawy
NEW YORK, Jan 6 (Reuters) - The euro fell against the
dollar on Thursday and European government bond yields jumped
as investor concerns re-emerged over the mounting bill for
rescuing some euro zone countries and Europe's financial
sector.
U.S. stocks mostly fell as some big U.S. retailers missed
Wall Street estimates for December sales after a post-Christmas
blizzard slowed a two-month shopping spree, driving down
consumer shares. Energy shares declined along with oil prices.
Spreads between peripheral euro zone government bond yields
and benchmark German debt widened as investors became spooked
at the prospect of fresh supply next week from the region's
higher-yielding issuers.
Wider spreads were driven by a rise in Portuguese debt
yields as that country's IGCP debt agency said it will issue
between 750 million euros and 1.25 billion euros in two bond
maturities at an auction on Jan. 12. For details, see
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Debt auctions in Spain and Italy are also scheduled for
next week.
"It's continuing concern about the refinancing risk for
euro zone countries in the next few weeks," said Samarjit
Shankar, managing director of global foreign exchange strategy
at BNY Mellon in Boston.
"In general, the euro is suffering from some fundamental
concerns about the sustainability of the currency itself in
terms of the sovereign debt crisis."
The euro fell to $1.2997 on trading platform EBS, its
weakest level in five weeks. It last traded down down 1.2
percent at $1.3002 <EUR=EBS>.
The dollar index, which measures the greenback's value
against a basket of major currencies <.DXY> was up 0.68 percent
at 80.800.
The dollar's rise was bolstered by generally upbeat U.S.
data and ahead of Friday's U.S. payrolls report, which is
expected to show job gains of 175,000 in December, according to
a Reuters poll. Some analysts are expecting employment gains of
as much as 500,000.
U.S. stocks eased as disappointing sales from top retailers
dented hopes about the holiday shopping season.
The Dow Jones industrial average <> was down 42.04
points, or 0.36 percent, at 11,680.85. The Standard & Poor's
500 Index <.SPX> was down 4.44 points, or 0.35 percent, at
1,272.12. The Nasdaq Composite Index <> was up 3.31
points, or 0.12 percent, at 2,705.51.
European stocks, however, closed at their highest in nearly
28 months on expectations for renewed U.S. economic growth.
The FTSEurofirst 300 <> index of top European shares
finished 0.4 percent higher at 1,147.23 after touching
1,154.10, the highest since September 2008.
World stocks as measured by MSCI <.MIWD00000PUS> dipped 0.2
percent. Emerging markets stocks <.MSCIEF> were down 0.5
percent.
The euro <EUR=> tumbled to a five-week low against the
dollar, and the greenback's rise reverberated throughout the
commodities market.
U.S. light sweet crude oil futures <CLc1> fell $1.91, or
2.12 percent, to $88.39 per barrel. The Reuters/Jefferies CRB
Index <.CRB> was down 3.74 points, or 1.14 percent, at 325.46.
Spot gold <XAU=> fell 0.3 percent to $1,373.80 an ounce.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
12/32, with the yield at 3.42 percent. The 2-year U.S. Treasury
note <US2YT=RR> was up 2/32, with the yield at 0.68 percent.
The 30-year U.S. Treasury bond <US30YT=RR> was up 7/32, with
the yield at 4.53 percent.
The crisis in poorer euro zone states such as Greece and
Ireland has triggered investor flight out of the so-called euro
zone periphery, which also includes Portugal, Spain and Italy.
(Additional reporting by Gertrude Chavez-Dreyfuss, Frank Tang,
Ellen Freilich in New York; Editing by Padraic Cassidy)
