* Global stocks rise for third day on U.S. retail sales
* Gold jumps, Swiss intervention raise devaluation specter
* Oil rebounds after 10 pct fall over past two sessions
* Government debt prices rise as new issuance is accepted
(Recasts with U.S. markets, changes dateline; previous
LONDON)
By Herbert Lash
NEW YORK, March 12 (Reuters) - Stocks around the world rose
for a rare third day in a row on Thursday on reassuring U.S.
retail sales and gold jumped after Switzerland intervened in
currency markets, heralding a possible beggar-thy-neighbor
policy war.
Oil jumped more than 6 percent and helped lift energy
shares on both sides of the Atlantic as strong loan data from
China led investors to speculate it could spur global growth.
The Swiss move to head off deflation by devaluing its
currency is the first by a big central bank. Analysts said it
could push the European Central Bank to follow the
"unconventional easing" measures of the U.S. Federal Reserve
and Bank of England. For details, see []
The franc fell in its biggest one-day drop ever against the
euro, as the intervention and interest rate cut by the Swiss
National Bank went far beyond what analysts had expected.
The U.S. dollar rose against the euro and yen, while
euro-zone government bonds shot higher after the Swiss central
bank signaled it stood ready to buy fixed-income assets.
The intervention suggested one of the world's safest
currencies was deliberately undermined to help boost growth,
which could lead other countries to follow.
"If all currencies are being devalued against each other
then gold is a currency which is going to profit from it,"
Commerzbank analyst Eugen Weinberg said in Frankfort.
Mark Chandler, a senior currency strategist at Brown
Brothers Harriman in New York, said the intervention raised
questions, even though it enjoyed immediate success.
The Swiss move comes ahead of a gathering of finance chiefs
from the Group of 20 rich and developing economies near London
this weekend that will likely include calls to avoid
protectionism, often cited as a contributing factor in the
Great Depression
.
"It is troubling that a country with a current (account)
surplus larger than 10 percent of GDP feels compelled to
depreciate its currency," Chandler said.
U.S. stocks rallied about 2 percent, spurred by a slight
dip in U.S. retail sales in February that suggested consumer
spending may be stabilizing. []
"Investors psychologically are at a crossroads. We've seen
a significant rally for the past couple of days. I think
investors in general are wondering if this is a false start or
a real-deal type rally," Michael Koskuba, a portfolio manager
at Victory Capital Management.
"The other question is, did we hit a bottom?" Koskuba
said.
Wal-Mart Stores Inc <WMT.N> rose 3.1 percent while GE
<GE.N> shares jumped about 12 percent after Standard & Poor's
ratings service cut its credit rating on the conglomerate just
one notch to AA-plus with a stable outlook.
Investors had feared a downgrade would be deeper or the
outlook negative. []
After 1 p.m., the Dow Jones industrial average <> rose
133.57 points, or 1.93 percent, at 7,063.97. The Standard &
Poor's 500 Index <.SPX> gained 15.23 points, or 2.11 percent,
at 736.59. The Nasdaq Composite Index <> climbed 25.41
points, or 1.85 percent, at 1,397.05.
European shares ended higher for a third straight session,
with retailers jumping on positive results by Morrison <MRW.L>
and Delhaize <DELB.BR>.
The FTSEurofirst 300 <> index of top European shares
closed 0.6 percent higher at 696.89 points.
U.S. Treasury debt prices jumped in price after strong
demand in an auction of $11 billion of reopened 30-year bonds.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
18/32 in price to yield 2.84 percent. The 2-year U.S. Treasury
note <US2YT=RR> added 1/32 in price to yield 1.0038 percent.
Weak labor market data had weighed on U.S. government debt
prices, while the GE downgrade, although expected, rattled
investors and helped to support bonds.
New applications for state unemployment insurance benefits
increased to a seasonally adjusted 654,000 in the week ended
March 7, offsetting the positive aspects of retail sales.
[]
"Clearly the consumer is not completely knocked out," said
Michael Woolfolk, senior currency strategist at the Bank of New
York-Mellon in New York.
"The difficulty, though, is we still need jobs growth and
credit markets to thaw out before we can have a normal
recovery."
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> was up slightly at 87.886. Against
the yen, the dollar <JPY=> was up 0.63 percent at 97.81
The euro <EUR=> fell 0.05 percent at $1.282.
U.S. light sweet crude oil <CLc1> rose $3.61 to $45.94 a
barrel, helped by the stronger-than-expected retail sales.
Spot gold prices <XAU=> rose $15.75 to $922.40.
Japanese and other Asian markets were on the defensive
overnight as investors viewed rare gains this week as overdone
in light of a shaky global economy and financial system.
The MSCI index of shares elsewhere in Asia-Pacific
<.MIAPJ0000PUS> dropped 0.2 percent, cutting into 5 percent of
gains over the previous two sessions.
(Reporting by Ellis Mnyandu, Gertrude Chavez-Dreyfuss, Pedro
Nicolaci da Costa in New York and Joe Brock, Paul Lauener and
Jan Harvey in London; writing by Herbert Lash; Editing by Tom
Hals)
