* U.S. dollar sinks on falling U.S. consumer sentiment
* Stocks advance on upbeat outlook from retailers
* Gold pushes up toward record highs
By Daniel Bases
NEW YORK, Nov 13 (Reuters) - Investors were pulled in
different directions on Friday, with a grim U.S. consumer
outlook tugging the dollar lower while upbeat comments from big
U.S. retailers helped stoke a rally in stocks.
Euro zone data showed the region resumed growth, while a
widening September U.S. trade deficit compounded the selling of
the U.S. currency.
Share prices in Britain closed at a 14 month high, helped
by banking an commodity stock gains while European shares in
general ended the week at three week peaks.
Gold rose toward a new record, aided by the weak U.S.
currency, which also contributed to higher grain prices. But
the weak consumer and trade data undermined crude oil prices.
"There is increasing evidence that the recovery in the U.S.
is much more vulnerable than previously thought, which provides
another reason for traders to bail out of U.S. dollars," said
Kathy Lien, director of currency research at GFT Forex in New
York.
"The Federal Reserve has all the right reasons to (keep)
monetary policy easy for a very long time," she added.
The volatile trading belies an uncertain investment
environment where doubts remain over whether economic revival
is taking a firm hold or still dependent on government stimulus
and low interest rate policies.
In the currency markets, the euro <EUR=> was up 0.53
percent at $1.4921 against the greenback. Against the Japanese
yen, the dollar <JPY=> was down 0.92 percent at 89.55.
The ICE Futures U.S. dollar index <.DXY>, a gauge of the
greenback against six other major currencies, fell 0.51 percent
to 75.22, just above Wednesday's 15-month low.
A report showed the euro zone economy grew 0.4 percent
quarter-on-quarter after five consecutive quarters of shrinking
output, lower than forecasts of 0.5 percent. []
"It's encouraging to see that the euro zone has returned to
growth in the third quarter," said RBS currency strategist Paul
Robson.
"Data out of China has been robust and policymakers around
the world have indicated that they will keep monetary policy
loose, which is broadly supportive of higher-yielding and
commodity-related currencies," Robson said.
HEARTS, MINDS AND WALLETS
Data from the Reuters/University of Michigan Surveys of
Consumers showed U.S. consumer confidence fell to its weakest
in three months amid dismal expectations for job and income
prospects. [] []
Speaking to Reuters Insider television, Richard Curtin, the
director of the consumer survey offered a counter argument to
the retailers, saying purchase plans are being shelved and
retail sales will not be robust.
Curtin said the survey found just one in 10 consumers saw
an increase in their income, the fewest recorded in data going
back to 1946, and that 36 to 37 percent of those surveyed said
their income had declined.
"This is really a concern for consumers that their
financial situation is just heading south, and there is really
little hope that they can expect to improve in the year ahead,"
he said.
Curtin said retailers will certainly discount merchandise.
But reports from retailers JC Penney <JCP.N> and
Abercrombie & Fitch Co <ANF.N> showed earnings either met or
beat analyst expectations, helping U.S. stocks advance.
"When we get depressed, we go shopping," said Jeff
Kleintop, chief market strategist at LPL Financial in Boston.
About 1 p.m. (1800 GMT) the Dow Jones industrial average
<> was up 96.36 points, or 0.94 percent, at 10,293.83. The
Standard & Poor's 500 Index <.SPX> was up 9.27 points, or 0.85
percent, at 1,096.51. The Nasdaq Composite Index <> was up
20.94 points, or 0.97 percent, at 2,169.96.
The FTSEurofirst 300 <> index of top European shares
rose 0.4 percent to 1,019.41 points, its highest close since
Oct. 21, and just 0.7 percent short of a 13-month closing
high.
Japan's Nikkei-225 index <> fell 0.4 percent.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 2/32, with the yield at 3.4513 percent. The euro zone's
10-year Bund yielded 3.382 percent <EU10YT=RR>, up 2 basis
points from late Thursday trade.
Spot gold prices <XAU=> rose $11.80, or 1.07 percent, to
$1,115.20, while U.S. light sweet crude oil <CLc1> fell 14
cents, or 0.18 percent, to $76.80 per barrel.
Wheat and soybean prices rose while corn fell.
(Additional reporting by Chris Reese, Wanfeng Zhou, Rodrigo
Campos in New York; Dominic Lau, Jessica Mortimer in London;
Wayne Cole in Sydney; and Miho Yoshikawa in Tokyo; Editing by
Kenneth Barry)
