* Global stocks rise for 3rd day on GE, U.S. retail sales
* Gold jumps, Swiss intervention raise devaluation specter
* Oil rises 11 pct after deep fall over past two sessions
* Government debt prices rise as new issuance is accepted
(Adds close of U.S. markets)
By Herbert Lash
NEW YORK, March 12 (Reuters) - Stocks around the world rose
for a rare third straight day on Thursday as U.S. retail sales
sparked confidence and gold jumped after Switzerland intervened
in currency markets, heralding a possible beggar-thy-neighbor
policy war.
Oil jumped more than 11 percent, lifting energy shares on
both sides of the Atlantic, after the better-than-expected U.S.
sales data for February. Strong loan data from China also
helped as investors speculated it could spur global growth.
U.S. stocks rallied about 4 percent, spurred by the slight
dip in retail sales, which suggested consumer spending may be
stabilizing []. Stocks also gained on relief that
an S&P credit ratings cut in General Electric <GE.N> was just
one notch and that no further cuts loomed.
Investors had feared the downgrade on GE -- a widely held
stock that is viewed as an economic bellwether -- would be
deeper or the outlook negative. [].
"The outlook was stable. That's very good news," said Hugh
Johnson, chief investment officer of Johnson Illington Advisors
in Albany, New York. "It wasn't quite as bad as it could have
been."
GE shares jumped 12.7 percent.
The Dow Jones industrial average <> closed up 239.66
points, or 3.46 percent, at 7,170.06. The Standard & Poor's 500
Index <.SPX> gained 29.38 points, or 4.07 percent, at 750.74.
The Nasdaq Composite Index <> rose 54.46 points, or 3.97
percent, at 1,426.10.
The Swiss move to head off deflation by weakening the franc
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.
Euro-zone government bonds shot higher after the Swiss
central bank signaled it stood ready to buy fixed-income
assets.
The dollar fell against a basket of major currencies, with
the U.S. Dollar Index <.DXY> down 0.62 percent at 87.326.
Against the yen, the dollar <JPY=> rose 0.57 percent at 97.75.
The euro <EUR=> rose 0.76 percent at $1.2925.
The intervention suggested one of the world's safest
currencies was deliberately weakened 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 Frankfurt.
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, a contributing factor in the 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.
European shares ended higher for a third straight session,
with retailers rising 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 climbed as robust demand for $11
billion of 30-year bonds soothed initial concerns about
investors' ability to absorb another week of massive supply.
The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
10/32 in price to yield 2.88 percent. The 2-year U.S. Treasury
note <US2YT=RR> rose 1/32 in price to yield 1.00 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."
U.S. light crude <CLc1> rose $4.70 to settle at $47.03 a
barrel, after falling more than 7 percent on Wednesday. London
Brent crude <LCOc1> gained $3.69 to end at $45.09 a barrel.
U.S. gold futures for April delivery <GCJ9> settled up
$13.30, or 1.5 percent, at $924.00 an ounce on the COMEX
division of the New York Mercantile Exchange.
(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 Chizu
Nomiyama)
