GLOBAL MARKETS-Strong U.S. retail data boosts stocks, oil

* Better-than-expected US retail sales boost risk appetite

* Disappointing earnings results curb U.S. stock gains

* Dollar, Treasuries fall as safe-haven appeal dimmed

By Walter Brandimarte

NEW YORK, Sept 15 (Reuters) - Surprisingly strong U.S. retail sales spurred renewed appetite for risk on Tuesday, driving up U.S. and European stocks and the price of oil, as the data raised hopes of a steady recovery from recession.

U.S. retail sales jumped 2.7 percent in August, the fastest pace in three-and-a-half years and outpacing expectations for a 2.0 percent rise. For details, see [ID:nN14478930].

U.S. consumer spending accounts for about two-thirds of the economy.

"The retail sales number shows more strength for consumers than we were thinking," said Peter Kenny, managing director at Knight Equity Markets in Jersey City. "The numbers are good for the market."

Data showing that New York State manufacturing activity hit a near two-year high and a report showing prices received by U.S. producers rose faster than expected last month also fueled investor optimism about the economy.

Federal Reserve Chairman, speaking at the Brookings Institution in Washington, D.C., on the one-year anniversary of the collapse of Lehman Brothers, said the U.S. recession "is very likely over."

Stock market gains in New York were tempered by disappointing quarterly results from electronics chain Best Buy Co Inc and reports by some big financial companies of rising credit card delinquencies.

"The retail sales data is another positive for those looking for an economic rebound, but the defaults are a wake-up call for those expecting a V-shaped recovery," said Elliot Spar, options market strategist at Stifel Nicolaus & Co in Shrewsbury, New Jersey.

The Dow Jones industrial average <.DJI> rose 55.40 points, or 0.58 percent, to 9,682.20 while the Standard & Poor's 500 Index <.SPX> edged up 4.18 points, or 0.40 percent, to 1,053.52. The Nasdaq Composite Index <.IXIC> was up 11.39 points, or 0.54 percent, at 2,103.17.

Best Buy shares slid 5.1 percent to $38.35, and supermarket operator Kroger Co lost 8.2 percent to $20.30 after reporting disappointing earnings.

JPMorgan Chaase & Co and Discover Financial both reported worsening consumer credit. JPMorgan shares slipped 0.3 percent and Discover shares were off 0.4 percent.

Shares of Ebay and Yahoo jumped on analyst upgrades. Ebay gained 2.1 percent and Yahoo added 5.1 percent.

In Europe, the FTSEurofirst 300 <.FTEU3> index of top shares closed 0.1 percent higher at 992.37 points, gaining ground for the seventh time in eight sessions. The robust U.S. retail sales rekindled hopes of a speedy economic recovery, and banking stocks paced the gains.

"Good macro figures are piling up," said Jacques Henry, analyst at Louis Capital Markets, in Paris.

"There has been no negative signal on the macro front in a while, and the economic recovery is happening quickly. Long-only investors are coming back en masse," he said.

Emerging stock markets were also on the rise, with a benchmark MSCI stock index for the asset class <.MSCIEF> up 1.13 percent.

The MSCI's all-country world stock index <.MIWD00000PUS> rose 0.44 percent, resuming a seven-session winning streak that had been interrupted by Monday's losses.

The dollar was nearly flat against other major currencies as the gains in global stock markets reduced the greenback's appeal as a safe haven. The U.S. Dollar Index <.DXY> dipped 0.13 percent.

The euro was up 0.14 percent at $1.4644 from a previous session close of $1.4623. Against the Japanese yen, the dollar was up 0.03 percent at 90.95 from a previous session close of 90.920.

The growing optimism about the global recovery also encouraged investors to sell U.S. Treasuries, a traditional safe haven, pulling benchmark yields back from two-month lows.

The benchmark 10-year U.S. Treasury note was down 9/32, with the yield at 3.4578 percent from the previous session's close of 3.424 percent. The 30-year U.S. Treasury bond declined 14/32, with the yield at 4.2547 percent from 4.23 percent late on Monday.

Oil jumped more than 3 percent to top $71 a barrel, bolstered by the retail data and Bernanke's comments..

U.S. crude for October delivery rose $2.24 to $71.10 a barrel by 1:59 p.m. EDT (1746 GMT). October Brent -- which was pressured ahead of the contract's expiration Tuesday -- fell 19 cents to $67.25 a barrel.

Traders have been looking to equities markets and wider economic data for signs of a turnaround that could bolster flagging oil demand.

"Once the S&P (500 index) firmed and when Bernanke said recession was near an end it seemed to send crude back up above $70," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut. (Additional reporting by Nick Olivari and Ryan Vlastelica; Editing by Leslie Adler)