* Tepid earnings, lower energy shares keep lid on stocks
* Oil price falls on high U.S. inventories
* Euro buoyed by German bond auction; fails to hold gains
(Updates U.S. midday trading, New York dateline)
By Al Yoon
NEW YORK, Aug 18 (Reuters) - World stocks struggled to hold
a positive trend on Wednesday after tepid earnings reports from
some big U.S. companies and energy shares fell as crude oil
prices were pressured by a disappointing industry report.
The euro fell, surrendering early gains against the dollar
after a German government bond auction attracted solid demand,
easing concern about fiscal instability in the European Union.
Oil prices pared losses after a government report showed
U.S. crude stocks last week fell less than analysts had
expected. That report undercut some of the pressure on prices
after the American Petroleum Institute late on Tuesday showed a
rise in crude stocks last week.
On Wall Street, shares eased a day after rallying more than
1 percent, as investors grappling with the direction of the
economy assessed the latest corporate earnings.
Retailers were again in focus. Discounter Target Corp.
reported weak same-store sales but its shares recovered after
the company said it sees third-quarter same-store sales rising
by 1 to 3 percent.
However, declining energy shares and lackluster earnings
kept gains in check. The S&P 500 index was also trading around
its 50-day moving average, struggling to break it decisively.
The 50-day average is currently around 1,088.
The inability to push through that level with conviction is
illustrative of an unenthusiastic market as investors reassess
their outlook on the economy, said Kurt Brunner, portfolio
manager at Swarthmore Group in Philadelphia, Pennsylvania.
"You don't have the energy to push it through and that
might take a little while," Brunner said.
The Dow Jones industrial average <> fell 10.93 points,
or 0.11 percent, to 10,394.92. The Standard & Poor's 500 Index
<.SPX> eased 0.42 point to 1,092.12 and the Nasdaq Composite
Index <> edged up 6.95 points to 2,216.39.
Also on Wednesday, warehouse club operator BJ's Wholesale
Club Inc <BJ.N> missed profit expectations, sending its shares
down 3.7 percent at $41.70. Target <TGT.N> gained 2.9 percent
to $52.17 after earlier losing about 3 percent.
With consumer spending typically accounting for about
two-thirds of U.S. economic activity, retailers have come under
heavy scrutiny by investors.
The rebound lifted the consumer discretionary sector and
helped indexes come off their lows.
In other earnings, Deere & Co <DE.N>, the maker of
construction, forestry and agricultural equipment, beat
estimates, but said sales were "far below normal levels" and
pointed to deteriorating conditions in Europe. Deere lost 2.2
percent to $65.73. []
Shares of global miner BHP Billiton <BHP.AX><BLT.L>
remained in focus, falling more than 3 percent in London on
concerns that it may have to overpay for fertilizer group
Potash Corp after the Canadian firm rejected an initial offer.
In Europe the pan-European FTSEurofirst 300 <> closed
down 0.4 percent, pressured by energy stocks.
U.S. crude for September delivery <CLc1> fell $1.05 to
$74.72 a barrel. Crude oil is down around 4 percent this
month.
World shares as measured by MSCI <.MIWD00000PUS> and
Thomson Reuters <.TRXFLDGLPU> eked out gains of 0.1 percent.
Japan's Nikkei <> closed up about 0.9 percent.
Traders warned against reading too much into market moves
at the moment given that it is high summer in the northern
hemisphere and there are major questions about the direction of
the world economy.
"The market is still rangebound. There is no conviction at
the moment, and this will go on until September when investors
come back from holiday," said Alexandre Le Drogoff, technical
analyst at Aurel BGC in Paris.
The dollar endured selling pressure against the yen, easing
toward recent 15-year lows on growing speculation that Japanese
authorities are unlikely to intervene to counter their
currency's recent strong run.
The euro recovered from the day's low after a 5 billion
euro sale of German 10-year debt produced a record-low average
yield of 2.37 percent, but failed to hold above the key level
of $1.2900.
The euro declined 0.09 percent at $1.2868 <EUR=>.
"There is currently not enough fundamentally positive news
out of Europe to drive the euro beyond 1.2900 on a sustained
basis," said Joseph Trevisani, chief analyst at FX Solutions in
Saddle River, New Jersey.
Sterling rose after the the release of minutes from the
Bank of England's policy meeting earlier this week showed
officials were less dovish than expected.
The dollar shed 0.23 percent against the yen to 85.33 yen
<JPY=>, not far from a 15-year low of 84.72 yen hit on trading
platform EBS last week.
U.S. Treasury bond prices gained as the decline in equities
refreshed concerns about economic strength.
The 30-year bond surged more than a point in price to yield
3.70 percent, down from 3.77 percent at Tuesday's close and a
fresh 16-month low. Longer-dated German bonds rallied after
Berlin drew strong demand at a 5 billion euro sale of new
10-year paper at a record low average yield.
Gold <XAU=> rose $8.90, or 0.73 percent, to $1,231.80.
(Additional reporting by Blaise Robinson and Anirban Nag in
London, and Edward Krudy, Leah Schnurr and Nick Olivari in New
York, and Brad Dorfman in Chicago; Editing by Leslie Adler)
