* U.S. stocks boosted by record retail sales report
* ECB's Trichet says Greece 'default is not an issue'
* Treasuries lower on stocks; 2-year Treasury at 1 pct
(Updates with closing prices)
By Jennifer Ablan
NEW YORK, April 8 (Reuters) - The euro rose against the
dollar on Thursday after the head of the European Central Bank
said Greece was not in danger of defaulting of its debt, while
U.S. equities reversed early losses to finish higher as
strength in retail sales boosted optimism about the economy.
European shares, however, shed almost 1 percent to close at
a more than one-week low as the worries about Greece continued
to dog sentiment.
Remarks by the president of the European Central Bank,
Jean-Claude Trichet, after a policy meeting where the ECB held
rates steady, comforted jittery financial markets from Europe
to New York amid growing concerns that a rescue plan for
debt-stricken Greece would fall apart.
"I would say that taking all the information I have, a
default is not an issue for Greece," Trichet said. "We are
responsible for 330 million people and for 100 percent of the
GDP of the euro area. Greece represents 2.5 percent of the GDP
of the euro area, but it is obviously an important issue." For
more see []
The euro <EUR=> was up 0.07 percent at $1.335, after
earlier falling as low as $1.3282, according to Reuters data.
The low was near its 2010 trough of $1.3267 set in March on
electronic trading platform EBS, which was also its lowest
since May last year.
Trichet's comments "helped boost demand for the euro," said
Michael Malpede, an analyst at Easy Forex in Chicago. "It may
have calmed some of the jitters ... over the Greek debt
situation," he added, but "I don't think Trichet's comments
changed anything."
After the close of U.S. markets, Greece's economy minister,
Louka Katseli, said there was no chance the country will
default on its debt.
On Wall Street, stocks rose on as top U.S. retail chains
posted a record 9.1 percent rise in monthly same-store sales
for March. The early Easter holiday and an improving job market
helped retailers beat Wall Street's forecast. []
"Retail sales are the whole backbone of the entire
recovery," said Keith Springer, president of Capital Financial
Advisory Services in Sacramento, California.
"The whole premise is, if consumer spending and retail
sales maintain anywhere close to where they were a couple years
ago, then that will be a true recovery."
Consumer spending accounts for roughly two-thirds of U.S.
economic activity.
An S&P retail index <.RLX> rose 1.33 percent.
Online merchant Amazon.com <AMZN.O> shot up 4.4 percent to
$140.77, leading the S&P 500 higher. It was the third biggest
percentage jump in Amazon shares this year.
The Dow Jones industrial average <> was up 29.55
points, or 0.27 percent, at 10,927.07, while the Standard &
Poor's 500 Index <.SPX> was up 3.99 points, or 0.34 percent, at
1,186.44. The Nasdaq Composite Index <> was up 5.65
points, or 0.23 percent, at 2,436.81.
MSCI's all-country world index of global equities
<.MIWD00000PUS> was off 0.22 percent, while emerging market
shares <.MSCIEF> were down 0.55 percent.
The FTSEurofirst 300 index <> ended down 0.93 percent
at 1,087.99 points.
Markets pounded Greek bonds and banking stocks, driving the
debt-stricken euro zone member's borrowing costs to new highs
and pushing it closer to tapping a last resort EU/IMF safety
net.
"It is now up to the Greek government to go publicly to the
EU and IMF and ask for the cash and the support; the matter
cannot be long delayed," Chris Pryce, Fitch Ratings' senior
analyst for Greece, told Reuters in an interview.
In Asia, the Nikkei 225 Index <> dropped 1.1 percent.
RISK AVERSION ABATES
U.S. Treasury debt prices were down as selling pressure on
global equities ebbed.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 7/32, with the yield at 3.89 percent, while the two-year
U.S. Treasury note <US2YT=RR> was down 1/32, with the yield at
1.07 percent. The 30-year U.S. Treasury bond <US30YT=RR> was
down 3/32, with the yield at 4.75 percent.
Treasuries got a boost earlier on an unexpected rise in
weekly U.S. jobless claims data. The number of U.S. workers
filing new claims for unemployment insurance rose unexpectedly
last week, reflecting seasonal volatility, according to a
government report on Thursday. []
The dollar was up against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> up 0.12 percent
at 81.537 from a previous session close of 81.443.
The euro was up 0.07 percent at $1.335 from a previous
session close of $1.3340. Against the Japanese yen, the dollar
<JPY=> was down 0.01 percent at 93.33 from a previous session
close of 93.340.
Earlier, the ECB left euro zone interest rates at a record
low of 1 percent. []
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> fell 39 cents, or 0.45 percent, to $85.49 per
barrel, while spot gold prices <XAU=> rose $2.35, or 0.20
percent, to $1149.80. The Reuters/Jefferies CRB Index <.CRB>,
meanwhile, was down 2.34 points, or 0.84 percent, at 275.25.
(Additional reporting by Wanfeng Zhou; Editing by Leslie
Adler)
