* U.S. stocks stage late rally on banking, retail shares
* Spike in Chinese inflation stirs rate hike concerns
* Oil a tad higher as inflation spike scare ebbs
* Bonds slips but 30-year climbs after successful auction
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, March 11 (Reuters) - Global stocks rebounded and
oil edged higher on Thursday on renewed optimism over the U.S.
economy, overcoming a scare that interest rates may be heading
higher because of an inflation spike in China.
The benchmark S&P 500 climbed to a 17-month closing high in
a late-day rally sparked by rising retail and banking shares,
including a 5.6 percent jump in Citigroup Inc <C.N>.
Shares worldwide had been under water for most of the day
after the spurt in Chinese inflation to 16-month highs sparked
concerns China may tighten monetary policy sooner rather than
later to curb economic growth and inflation. For details see:
[]
Oil settled 2 cents higher but remained under pressure from
the inflation scare and worries in other markets that the U.S.
Federal Reserve might signal the end of its zero-rate policy
next week at a meeting of Fed policy-makers. []
Benchmark costs for banks borrowing dollars around the
globe rose to a 3-1/2 month high as next week's meeting of the
Federal Open Markets Committee loomed. []
Citigroup Chief Executive Vikram Pandit told investors that
the bank is on track to return to sustained profitability and
that local consumer lending was the biggest driver of
performance of Citi Holdings in 2009. []
The KBW bank index <.BKX> rose 1.7 percent to a fresh
16-month high.
Retailers posted big gains, led by a 2.4 percent rise in
online retailer Amazon.com <AMZN.O>, a day ahead of the U.S.
Department of Commerce's monthly retail sales data.
The S&P retail index <.RLX> added 0.8 percent.
The Dow Jones industrial average <> closed up 44.51
points, or 0.42 percent, at 10,611.84. The Standard & Poor's
500 Index <.SPX> climbed 4.60 points, or 0.40 percent, at
1,150.21. The Nasdaq Composite Index <> was up 9.51
points, or 0.40 percent, at 2,368.46.
The dollar traded little changed versus major currencies
after mixed data on U.S. trade and jobless claims failed to
give investors direction. []
The U.S. trade gap narrowed unexpectedly in January as oil
imports fell, while the number of U.S. workers filing new
applications for unemployment insurance was slightly more than
expected last week, hinting at a slow labor market recovery.
[]
"The dollar is really struggling to find direction and I
think investors are likely to shift their focus to tomorrow's
retail sales number," said John Doyle, foreign-exchange
strategist at Tempus Consulting in Washington.
The U.S. Dollar Index <.DXY> was down 0.22 percent at
80.268. The euro <EUR=> was up 0.16 percent at $1.3681, and
against the yen the dollar <JPY=> was up 0.03 percent at
90.54.
U.S. crude for April <CLc1> settled up 2 cents at $82.11 a
barrel and later climbed as high as $82.38.
London ICE April Brent <LCOc1> fell 20 cents to settle at
$80.28 a barrel.
"There's a lot of uncertainty on what the next market move
will be. It's consolidating at this point," said Andy Lebow,
broker at MF Global in New York.
Most U.S. government debt posted narrow price losses, but
the sale of $13 billion worth of 30-year bonds concluded the
Treasury's third auction this week and calmed concerns about a
sated appetite for U.S. debt.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 1/32 in price to yield 3.72 percent.
Spot gold prices <XAU=> turned around to trade $1.50 higher
at $1,109.30 an ounce.
(Reporting by Ellen Freilich, Rodrigo Campos, Wanfeng Zhou and
Burton Frierson in New York; writing by Herbert Lash;
