* Euro's sharp rise on solid debt auctions, hawkish ECB
* U.S., European share indexes close lower
* Oil, gold fall, grains rise to 2-1/2 year highs
(Updates with U.S. market close, stock futures, comments)
By Daniel Bases
NEW YORK, Jan 13 (Reuters) - The euro surged on Thursday,
taking on renewed vigor after better-than-forecast debt
auctions by Spain and Italy and a hawkish rate view from the
ECB but weak U.S. jobless claims data weighed on U.S. stocks.
Wall Street struggled from the start of the day, trading in
tight ranges before closing lower. Stocks in Tokyo are poised
to open weaker after closing at an eight-month high on
Wednesday. The Nikkei March futures contract traded in Chicago
was down 30 points at 10,590 <NKH1>.
The euro got an extra boost after European Central Bank
President Jean-Claude Trichet said the euro-zone economy faces
short-term inflationary pressures. The ECB had earlier left
interest rates unchanged at 1 percent. []
"He sent a mild warning to markets that the ECB's
assessment on interest rates could change," said Commerzbank
economist Michael Schubert.
Oil prices see-sawed but ultimately closed lower on the
day, undermined by the jobless claims report and the prospect
OPEC would raise output should prices break above $100 a barrel
for an extended period. []
Grain prices in Chicago traded touched their highest levels
in 2-1/2 years on food price inflation and supply concerns.
Gold prices fell after being unable to benefit from a
weaker U.S. dollar.
European shares closed lower, although Spanish banks
provided a pocket of strength following the solid sovereign
bond auctions in Spain and Italy on Thursday. These followed a
relatively easy sale of Portuguese debt on Wednesday.
Trichet and the auctions helped the euro score its best day
vs. the greenback in six months, rising 1.69 percent to $1.3357
<EUR=>.
"We can make another run probably to just above $1.34,
after which I would look to fade the move," said Paresh
Upadhyaya, head of Americas G10 FX Strategy at BofA Merrill
Lynch Global Research in New York.
"From a longer-term perspective, the factors that are at
play are euro negative. Funding concerns will continue to weigh
on the euro in the first quarter."
Against the Swiss franc, the euro reached a new 1-month
high to trade at 1.2876 francs <EURCHF=>.
The dollar fell 0.17 percent against the Japanese yen to
trade at 82.80 <JPY=>. Against a basket of currencies, made up
of its major trading partners, the U.S. dollar fell 1.07
percent <.DXY>.
U.S. light sweet crude oil <CLc1> fell 46 cents to settle
at $91.40 per barrel. Spot gold prices <XAU=> fell $12.15, or
0.88 percent, to $1,373.80 an ounce.
STOCKS SLIP ON JOBLESS CLAIMS
A surprisingly large increase in new weekly claims for
U.S. jobless benefits soured the mood in the U.S. stock market
while food and energy costs lifted December producer prices.
The claims rose to 445,000 from 410,000 in the prior week,
the biggest one-week climb in about six months, which
countered expectations for a small drop. []
U.S. stocks closed lower. The Dow Jones industrial average
<> fell 23.54 points, or 0.20 percent, to 11,731.90. The
Standard & Poor's 500 Index <.SPX> lost 2.20 points, or 0.17
percent, to 1,283.76. The Nasdaq Composite Index <>
dropped 2.04 points, or 0.07 percent, to 2,735.29.
Shares of drugmaker Merck & Co <MRK.N> fell 6.62 percent to
$34.69 after it said it would pull a blood clot drug from one
study and not give it to some patients in a late-stage trial.
Vorapaxar, seen as having large sales potential, was deemed
inappropriate for stroke patients. []
Intel Corp's <INTC.O> stock gained 1.5 percent to $21.61
after the closing bell, following the technology bellwether's
results and forecast, which exceeded expectations. For details
see [] Intel ended regular trading down slightly at
$21.29 a share.
The FTSEurofirst 300 <> index of top European shares
closed down 0.57 percent at 1,157.34 points after jumping 1.5
percent to a 28-month high in the previous session.
Spain's Banco Santander <SAN.MC> and BBVA <BBVA.MC> climbed
4.79 percent and 6.32 percent respectively. Madrid sold 3
billion euros of 5-year bonds. Rome sold 6 billion euros of 5-
and 15-year debt.
European mining shares were among the top decliners as key
base metals prices fell. Copper slipped after two days of
strong gains on worries about waning demand in top metals
consumer China, which is approaching its new year holidays.
The STOXX Europe 600 Basic Materials index <.SXPP> fell
1.84 percent.
MSCI's All-Country World index <.MIWD00000PUS>, hung on to
gain 0.46 percent, ending at 336.72, a fresh 28-month high.
In the debt markets, euro-zone interest-rate futures fell
while two-year German bond yields rose to their highest levels
since December as traders raised bets on a future interest-
rate hike after Trichet's hawkish comments on inflation.
The two-year German Schatz yield rose to a 3-1/2-week high
of 1.114 percent after Trichet said the bank had not
precommitted not to move rates and added that they had hiked
rates in July 2008 as the financial crisis got under way.
[]
The U.S. 10-year Treasury note rose 19/32 of a point in
price, pushing the yield down to 3.299 percent <US10YT=RR>.
(Additional reporting by Gene Ramos, Rodrigo Campos, Jeremy
Gaunt, Nigel Davies, Atul Prakash, Emelia Sithole-Matarise,
Ryan Vlastelica, Pedro Nicolaci da Costa and Paul Carrel)
