* U.S. stocks rise on better-than-expected retail sales
* Gold hits 6-month high as investors await U.S. payrolls
* Oil slips below $68 a barrel on mixed economic outlook
* Yen down broadly as risk tolerance reduces safety bid
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, Sept 3 (Reuters) - U.S. stocks rose on Thursday
after better-than-expected retail sales in August spurred
optimism, but gold climbed to almost $1,000 an ounce in a sign
of lingering risk aversion and fear of future inflation.
Crude oil slipped, settling just under $68 a barrel, as
disappointing news from the labor market outweighed upbeat data
showing that the U.S. service sector and retail sales improved.
For details, see: []
The yen fell from a seven-week high against the U.S. dollar
and declined versus other major currencies as a bearish tone
earlier this week in world stock markets eased and reduced the
Japanese currency's safe-haven allure. []
U.S. government debt prices fell, pulling benchmark yields
back from seven-week lows, amid nervousness ahead of a key U.S.
employment report on Friday. []
U.S. stocks ended up, snapping a four-day losing streak in
a strong late-day rally. Investors saw signs of recovery in
Thursday's data despite an unexpected rise in initial claims
for jobless benefits, and survey results showing the U.S.
non-manufacturing sector was still contracting in August.
U.S. retail sales in August on average fell 2.9 percent
from a year earlier, according to Thomson Reuters. That was
better than the 3.8 percent decline analysts expected and the
best performance since April. []
"It's the belief the economy is in the recovery stage.
What's rallying today are things associated with economic
growth," said Owen Fitzpatrick, head of U.S. Equity Group,
Deutsche Bank Private Wealth Management.
The Dow Jones industrial average <> closed up 63.94
points, or 0.69 percent, at 9,344.61. The Standard & Poor's 500
Index <.SPX> rose 8.49 points, or 0.85 percent, at 1,003.24.
The Nasdaq Composite Index <> gained 16.13 points, or 0.82
percent, at 1,983.20.
But worries among some investors that the U.S. payrolls
data may disappoint also sparked a flight to quality.
Spot gold <XAU=> hit a peak of $997.20 an ounce, as shares
of gold and silver miners rose as a hedge against uncertainties
over the strength of recovery and inflation. The gold bugs
index <.HUI> gained 5.8 percent.
U.S. crude prices for October delivery <CLc1> settled at
$67.96 a barrel, down 9 cents, after reaching a high of $69.40
on U.S. stock gains and a weaker dollar earlier.
London Brent crude <LCOc1> settled at $67.12 a barrel, down
54 cents.
Shares in Canada's Barrick Gold<ABX.N>, the world's largest
gold producer, rose 4.3 percent, while Denver-based Newmont
Mining's <NEM.N> stock gained 4.5 percent.
Widening government deficits across the globe, a weak
dollar and rising inflation concerns have made gold a
safe-haven, said Tom Sowanick, chief investment officer at
Clearbrook Partners in Princeton, New Jersey.
A lift to gold prices also has been sparked by commodity
trading advisers who are "piling on because they are trend
followers," Sowanick said.
Investors were unsettled by signs of faster inflation. The
Institute for Supply Management's non-manufacturing index for
August on Thursday showed the prices component jumped to a
reading of 63.1 from 41.3 in July, while ISM's manufacturing
activity report on Tuesday showed prices rose to 65 from 55.
Copper rose, helped by a strong rally in the precious
metals complex.
U.S. Treasuries prices slipped, pulling benchmark yields
off seven-week lows, on hints of stock market stability and on
nervousness ahead of a key employment report. []
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 10/32 in price to yield 3.34 percent.
European shares ended lower for a fourth consecutive
session on Thursday, with weaker energy and pharmaceutical
stocks outpacing gains made by financial and mining equities.
[]
The FTSEurofirst 300 <> index of top European shares
closed 0.06 percent lower at 949.82 points.
The dollar rose 0.5 percent to 92.62 yen <JPY=>, after
falling as low as 91.92 yen, according to Reuters data, its
lowest since July 13.
The euro was little changed at $1.4254 <EUR=>, off a
session peak of $1.4348. The yen also fell against other major
rivals, with the euro up 0.4 percent <EURJPY=R>.
Asian shares rose as a surge in the volatile Shanghai
market helped underpin indexes around the region, lifting the
MSCI index of Asia shares traded outside Japan 0.8 percent
<.MIAPJ0000PUS>. Japan's Nikkei share average <> fell 0.6
percent.
(Reporting by Angela Moon, Nick Olivari, Rebekah Kebede and
Ellen Freilich in New York; Atul Prakash and Jessica Mortimer
in London; writing by Herbert Lash, Editing by Chizu Nomiyama)
