(Adds European market close, oil price settlement)
* Strong U.S. economic data lifts stocks, bolster dollar
* Data bolsters notion Fed will hike rates in December
* Crude falls below $52 as abundant supplies weigh
* Wall St helped by strong banking sector results
By Herbert Lash
NEW YORK, Oct 14 Global stocks and the dollar
rebounded on Friday from losses a day earlier, buoyed by a
surprising rise in Chinese producer prices and U.S. economic
data that bolstered expectations the Federal Reserve would raise
interest rates in December.
The dollar was poised for its largest weekly gain in more
than three months, with rebounding U.S. retail sales and a rise
in producer prices last month indicating the economy regained
momentum in the third quarter after a lackluster first-half.
U.S. producer prices rose in September to post their biggest
year-on-year rise since December 2014, while retail sales gained
0.6 percent after a 0.2 percent decline in August.
Fed Chair Janet Yellen late in the session told a Boston
luncheon that U.S. economic potential is slipping and may need
aggressive steps to rebuild it in remarks that sent a ripple
through financial markets, analysts said.
"She's going to look for every excuse not to hike rates. So
by all means, this is very much on the dovish side," said Axel
Merk, president and chief investment officer of Merk Investments
in Palo Alto, California.
"If the markets have a fit, they're not going to hike. If
the markets are going to have smooth sailing until December,
'yes,' we'll hike," Merk said.
Yields on longer-dated Treasury securities ticked up, while
U.S. equities see-sawed on Yellen's comments.
Peter Kenny, senior market strategist at Global Markets
Advisory Group in New York, said Yellen has kept everyone
guessing as to when the next rate hike will occur, which has led
to an inconsistent and trendless trading pattern in equities.
The dollar index, which tracks the greenback against a
basket of six major currencies, added 0.49 percent to 97.997
and was up 1.3 percent for the week.
In China, September producer prices unexpectedly rose for
the first time in nearly five years and consumer inflation also
beat expectations, easing some concerns about the health of the
world's second-biggest economy.
Disappointing Chinese trade data on Thursday had rattled
investors and pushed global equity markets to three-month lows.
European shares tracked Asian markets higher and Wall Street
jumped as strong results from JPMorgan and Citigroup lifted
financial stocks. Shares later pared gains.
Shares of JPMorgan, the biggest U.S. bank by assets,
fell 0.10 percent after it beat forecasts for revenue and
profit. Citigroup rose 0.60 percent after
earnings fell less than expected.
In Europe, the pan-regional FTSEurofirst 300 index
rose 1.33 percent to close at 1,341.54, while MSCI's all-country
world index of equity markets in 46 countries
rose 0.31 percent.
The Dow Jones industrial average rose 58.62 points,
or 0.32 percent, to 18,157.56. The S&P 500 gained 2.19
points, or 0.1 percent, to 2,134.74 and the Nasdaq Composite
added 1.14 points, or 0.02 percent, to 5,214.48.
Oil slipped below $52 a barrel, giving up earlier gains, as
abundant crude supplies outweighed tighter U.S. fuel inventories
and plans by the Organization of the Petroleum Exporting
Countries to cut output.
Global benchmark Brent settled down 8 cents at
$51.95 a barrel. U.S. crude slid 9 cents to settle at
$50.35 a barrel.
The gain in Chinese producer prices helped lift U.S.
Treasury yields, with the benchmark 10-year note
down 15/32 in price to yield 1.7906 percent.
Rising U.S. Treasury yields, on the growing perception the
U.S. Federal Reserve will raise interest rates in December,
pushed euro zone government bond yields higher.
The benchmark 10-year German bund rose 2 basis
points to 0.05 percent.
The dollar rose 0.48 percent to 104.18 yen, while the
euro fell 0.72 percent to $1.0976.
(Reporting by Herbert Lash, additional reporting by Sam
Forgione in New York; Editing by Nick Zieminski)