* U.S. earnings hopes help lift world stocks
* Euro eases even after Japan buying pledge
* Dollar gains vs euro ahead of Portugal bond sale
* U.S. Treasuries down ahead of bond sale
(Updates with U.S. markets open, prices, quotes)
By Manuela Badawy and Jeremy Gaunt
NEW YORK/LONDON, Jan 11 (Reuters) - World stocks rose on
Tuesday on hopes for a solid U.S. earnings season, while the
euro slipped against the dollar after Japan's pledge to buy
euro zone bonds failed to calm renewed fears of a sovereign
debt crisis.
Japan said it was considering buying about 20 percent of
the bonds to be jointly issued later this month to raise funds
to support Ireland, but momentum in the euro's climb faded
after Tokyo said it would use existing euro reserves to pay for
the debt. For details, see []
Investors were also cautious ahead of a make-or-break debt
auction by struggling Portugal that will signal whether it will
be able to afford to raise funds in the debt market or be
forced to take a bailout. Spain will follow suit on Thursday.
U.S. Treasury prices were lower ahead of the $66 billion in
new government bond sales this week, while oil climbed above
$90 a barrel as a key Alaskan pipeline remained shut. Gold rose
for a second day on rising demand ahead from China.
Wall Street opened higher as the fourth-quarter earnings
season started with forecast-beating results from aluminum
maker Alcoa Inc <AA.N>, and higher outlooks from retailers.
The Dow Jones industrial average <> advanced 63.84
points, or 0.55 percent, at 11,701.29. The Standard & Poor's
500 Index <.SPX> was up 7.32 points, or 0.58 percent, at
1,277.07. The Nasdaq Composite Index <> rose 11.18 points,
or 0.41 percent, at 2,718.98.
"The fact that Alcoa did so well sets the tone for the rest
of the season," said Malcolm Polley, president and chief
investment officer of Stewart Capital Advisors in Indiana,
Pennsylvania.
Both Sears Holding Corp <SHLD.O> and Tiffany & Co <TIF.N>
raised their profit forecasts, citing strong sales.
[] and []
"Along with Alcoa, these raised outlooks suggest a
stronger-than-expected season ahead," said Adam Sarhan, chief
executive at the New York-based Sarhan Capital.
The FTSEurofirst 300 <> gained 1.4 percent. World
stocks as measured by MSCI <.MIWD00000PUS> were up 0.7 percent
with emerging markets <.MSCIEF> adding 0.8 percent. Japan's
Nikkei closed down 0.3 percent.
Analysts said the prospect of solid U.S. corporate earnings
gave stock investors the room to look past euro zone debt
concerns for the time being.
"The focus is switching to companies' results this week,
with earnings due from big U.S. names such as JPMorgan <JPM.N>,
but the euro zone debt fears will remain in the backdrop and
could continue to weigh on banking stocks," said Geraud
Missonnier, trader at Saxo Banque in Paris.
In the latest economic data, U.S. wholesale inventories
unexpectedly fell in November as wholesale sales outstripped
forecasts, the government reported, suggesting optimism about
the sustainability of demand. []
The stronger-than-expected sales and the fall in
inventories implied that demand during the holiday shopping
season may have been greater than retailers had anticipated.
SHOW OF SUPPORT
Japan pledged to buy euro zone bonds this month in a show
of support for Europe's debt struggle, but market players
doubted the gesture would offer the euro much relief.
The euro <EUR=> was down 0.19 percent at $1.2916 after
rising as high as $1.2992 on trading platform EBS, but the
focus was on this week's heavy schedule of debt issuance by
southern European countries, starting with Portugal.
The dollar gained against a basket of major currencies,
with the U.S. Dollar Index <.DXY> edged up 0.23 percent at
81.071.
On Wednesday, Portugal is scheduled to sell up to 1.25
billion euros of bonds in an auction that will signal whether
the indebted country can afford to raise funds in the debt
market or be forced to take a bailout.
Portugal's prime minister and finance minister both said
the government has no plans to seek a bailout, and the
government was doing everything possible to avoid one.
[]
Italy and Spain are due to tap the bond market on Thursday
in auctions that will also be closely watched for any sign of
troubled debt contagion. []
The premium that investors demand to hold bonds issued by
Spain, Italy and Portugal, rather than low-risk German Bunds,
reversed earlier, widening with traders citing European Central
Bank bond buying.
U.S. government bonds were lower ahead of the auctions as
dealers shorted Treasuries to prepare for the sale before
buying back the debt in the auctions.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 9/32, with the yield at 3.3221 percent. The 2-year U.S.
Treasury note <US2YT=RR> eased 1/32, with the yield at 0.585
percent. The 30-year U.S. Treasury bond <US30YT=RR> fell 18/32,
with the yield at 4.4964 percent.
The U.S. Treasury will sell $66 billion in new supply this
week, including $32 billion in three-year notes on Tuesday, $21
billion in reopened 10-year notes on Wednesday, and $13 billion
in reopened 30-year bonds on Thursday.
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> rose $1.23, or 1.4 percent, to $90.48 per barrel,
but a source told Reuters the Trans Alaska Pipeline was still
expected to restart this week after a spill on Saturday forced
it to shut down, idling 12 percent of U.S. oil production.
Spot gold prices <XAU=> were up $2.04, or 0.15 percent, to
$1,376.50 an ounce as last week's price decline encouraged an
improvement in consumer demand in China, pushing premiums for
gold bars to their highest in two years.
(Additional reporting by Wanfeng Zhou, Ryan Vlastelica, Karen
Brettell and Amanda Cooper; editing by Jeffrey Benkoe)
