RPT-GLOBAL MARKETS-Stocks fall after new Japan earthquake

* ECB raises rates, euro weaker

* Equities fall after strong earthquake in Japan

* Gold, corn hit record highs before backing off (Updates to Wall Street close, adds quote)

By Leah Schnurr

NEW YORK, April 7 (Reuters) - Global equities fell after a strong aftershock rocked Japan and the euro retreated against the dollar as the European Central Bank raised rates but signaled it was not necessarily the start of a round of hikes.

U.S. and European stocks fell after the earthquake measuring 7.4 shook northeast and eastern Japan. A tsunami warning was issued for the northeastern coast but later lifted. For details, see [ID:nL3E7F72Y2]

Nonetheless, Wall Street ended off its lows as better-than-expected retail sales and jobs data boosted optimism for a sustained economic recovery.

European stocks ended down 0.2 percent and the S&P 500 finished down 0.15 percent, while the dollar extended losses against the yen. U.S.-dollar denominated Nikkei futures were down 1.6 percent. Japan is the world's third-largest economy and investors feared the new quake could harm the global recovery.

"It got people thinking that maybe this is not finished yet, and this is of a bigger scale than what we had expected," said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

European shares had earlier gained after Portugal's request for aid fostered hopes the region's debt crisis will be staunched. The pan-European European FTSEurofirst 300 stock index <.FTEU3> was down 0.2 percent. Portugal's stock market bucked the trend, with the PSI 20 <.PSI20> index up 1.2 percent.

The Dow Jones industrial average <.DJI> slipped 17.26 points, or 0.14 percent, to 12,409.49. The Standard & Poor's 500 Index <.SPX> lost 2.03 points, or 0.15 percent, to 1,333.51. The Nasdaq Composite Index <.IXIC> eased 3.68 points, or 0.13 percent, to 2,796.14.

World stocks as measured by MSCI <.MIWD00000PUS> were off 0.2 percent.

The ECB raised rates by 25 basis points to 1.25 percent to counter firming inflation pressures. ECB President Jean-Claude Trichet said it was not necessarily the start of a series of similar steps, disappointing some who had expected a more hawkish tone. [ID:nLDE7351QH]

The euro was last down 0.3 percent at $1.4292, off a more than 14-month high of $1.4350 touched on Wednesday. (Additional reporting by Angela Moon; Editing by Dan Grebler)