* Tepid earnings, lower energy shares keep lid on stocks
* Oil falls on high U.S. inventories
* Target forecast revives U.S. consumer shares
(Updates with U.S. close)
By Al Yoon
NEW YORK, Aug 18 (Reuters) - World stocks scratched out
gains on Wednesday after a forecast from U.S. retailer Target
Corp aided the consumer outlook in a field of tepid earnings,
while 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.
Wall Street managed to build on Tuesday's rally of more
than 1 percent as investors grappling with the direction of the
economy assessed the latest corporate earnings.
Retailers were again in focus. Target <TGT.N> 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.
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 <> rose 9.69 points,
or 0.09 percent, to 10,415.54. The Standard & Poor's 500 Index
<.SPX> edged higher by 1.62 points to 1,094.16 and the Nasdaq
Composite Index <> climbed 6.26 points to 2,215.70.
Also on Wednesday, warehouse club operator BJ's Wholesale
Club Inc <BJ.N> missed profit expectations, sending its shares
down 2.7 percent at $42.14. Target <TGT.N> gained 2.5 percent
to $51.95.
With consumer spending typically accounting for about
two-thirds of U.S. economic activity, retailers have come under
heavy scrutiny by investors.
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 1.9
percent to $65.98. []
Shares of global miner BHP Billiton <BHP.AX><BLT.L>
remained in focus, falling more than 3.4 percent in London on
concerns that it may have to overpay for fertilizer group
Potash Corp after the Canadian firm rejected an initial
takeover 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 50 cents to
$75.27 a barrel. Oil is down around 4 percent this month.
World shares as measured by MSCI <.MIWD00000PUS> and
Thomson Reuters <.TRXFLDGLPU> eked out gains of less than 0.1
percent. Japan's Nikkei <> closed up about 0.9 percent.
Traders warned against reading too much into market moves
at the moment.
"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 key levels.
The euro declined 0.18 percent at $1.2856 <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.
The dollar shed 0.16 percent against the yen to 85.39 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 dipped as equities rose.
In light of Wednesday's modest pullback, investors and
analysts are divided whether the summer rally in bonds is
coming to end.
Statistical measures such as relative strength index
signaled Treasuries remain overbought.
"I view the great bull market in bonds to be approaching a
speculative blow-off, and I am increasingly of the view that
shorting the U.S. bond market will be the trade of the decade,"
wrote Doug Kass, a fund manager at Seabreeze Partners in Palm
Beach, Florida, in a note to clients.
But there is little evidence that investors are willing to
trim their bond holdings any time soon as the economic recovery
appears vulnerable, some analysts said.
The benchmark 10-year Treasury note <US10YT=RR> last traded
down 1/32 to 99-25/32, near its session low. Its yield was last
2.64 percent, flat from late on Tuesday and below a 17-month
low of 2.56 percent set two days ago.
The 30-year bond bucked the downtrend to rise 18/32 in
price to yield 3.74 percent after touching a 16-month mow of
3.68 percent earlier.
Gold <XAU=> rose $6.24, or 0.51 percent, to $1,229.10.
(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)
