Stocks, dollar gain on strong U.S. retail sales

Thu Jun 11, 2015 4:42pm EDT
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By Herbert Lash

NEW YORK (Reuters) - Global equity markets rose on Thursday on optimism over still testy Greek debt talks and on strong U.S. retail sales, which lifted the U.S. dollar and bolstered expectations the Federal Reserve will raise interest rates this year.

European shares pared gains after the International Monetary Fund's delegation unexpectedly left Brussels and flew home, citing major differences with Athens. Greece wants to step up negotiations, a Greek spokesman said later.

U.S. retail sales rose 1.2 percent in May after an upwardly revised 0.2 percent gain in April, the Commerce Department said, as households boosted purchases of automobiles and other goods.

While other U.S. data showed a slight increase in new applications for unemployment benefits, that number remained in territory associated with a tightening labor market.

"The retail sales is just another piece of the economic puzzle and one that investors have been waiting for," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "The Fed will definitely get one rate hike under its belt this year, and another one next year."

European shares rose, with the auto sector gaining on an upbeat forecast from Daimler (DAIGn.DE: Quote), while Greek shares .ATG rallied 8.2 percent on hopes that a resolution to its nagging debt woes was near. The market closed before the IMF news.

MSCI's all-country stock index .MIWD00000PUS rose 0.28 percent, while the pan-European FTSEurofirst 300 index .FTEU3 closed up 0.59 percent to 1,557.95, after being more than 1 percent higher earlier in the session.

Stocks on Wall Street rose but remained in a months-long trading range.   Continued...

People pass electronic information boards at the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan Wermuth