The dollar rallied yesterday, helped by unexpectedly strong US retail sales data, but global equity markets traded near break-even after a hefty run-up over the past three weeks put a damper on strong gains in the near term.

US retail sales rose 0.5 per cent in October after stripping out volatile gasoline and food services. The dollar index touched its highest level since June 2010, at 88.267, but later pared gains, off 0.13 per cent, at 87.560.

MSCI’s all-country world index edged higher, up one-tenth of one per cent as Wall Street attempted to pull ahead of break-even.

European shares fell, according to one measure, as a mixed bag of eurozone growth data showed France and Germany growing marginally but others like Italy still firmly in recession.

The pan-European FTSEurofirst 300 index provisionally closed down 0.2 per cent at 1,344.26.

Stocks on Wall Street were mixed. The benchmark S&P 500 index has gained 12 per cent and MSCI’s ACWI has gained eight per cent from their respective lows three weeks ago.

Philip Orlando, chief equity market strategist at Federated Investors in New York, said stocks were dramatically oversold in mid-October, and that data yesterday confirms in his mind that holiday sales at year’s end will be “pretty good”.

“The market at this point, as a forward-looking discounting mechanism, has started to price some of the good news in,” Orlando said. “We’ve seen the lion’s share of the move. Now we just sort of grind higher,” he said.

The Dow Jones industrial average fell 16.63 points, or 0.09 per cent, to 17,636.16.

The S&P 500 fell 0.12 points, or 0.01 per cent, to 2,039.21 and the Nasdaq Composite added 4.32 points, or 0.09 per cent, to 4,684.47.

The euro rebounded against the dollar to trade 0.33 per cent higher 41.2516. Earlier it briefly slipped below $1.24 at $1.2399.

The Japanese yen touched a seven-year low against the dollar, at 116.82 yen, immediately after the release of the US data. The yen was last at 116.31, or 0.50 per cent lower.

Oil rose to $79 a barrel, having earlier hit a four-year low, supported by speculation that the prospect of even lower prices may nudge Opec producers toward cutting output at a meeting in two weeks.

Brent hit an intra-day low of $76.76 earlier, the lowest since September 2010, before climbing back up to $79.05, or $1.56 a barrel higher. US crude was up 95 cents at $75.16.

US short-dated Treasuries prices dipped, but longer-dated Treasuries prices rose as some buyers stepped in to pick up higher US yields.

The benchmark 10-year US Treasury notes rose 4/32 in price to yield 2.3293 per cent.

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