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MSCI index rises with Wall street

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European shares close higher after four-day drop

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TSM, GE updates boost sentiment

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U.S. retail sales rise, weekly jobless claims fall

(Updates prices throughout after oil futures settlement)

By Sinéad Carew and Marc Jones

NEW YORK/LONDON, July 17 (Reuters) - MSCI's global

equity index advanced on Thursday while the dollar rose as

investors were encouraged by the latest crop of economic data

and earnings reports while oil futures rose on supply concerns

amid Middle East attacks.

Data on jobless claims showed that the number of Americans

filing new applications for unemployment benefits fell last

week, pointing to steady job growth so far in July, though some

laid off workers are experiencing long spells of unemployment

because of a moderation in hiring.

U.S. retail sales rebounded more than expected in June, but some

of the increase likely reflected higher prices for some goods

exposed to tariffs.

"In economic data two key releases came out today: retail

sales and jobless claims. Both were better than anticipated,"

said Mike Cornacchioli, investment strategy director and senior

vice president at Citizens Private Wealth.

"Those two illustrate the strength of the consumer and the

labor market. So, a lot of the fears that were placed on the

state of the U.S. economy are overblown and have failed to come

to fruition at this point in time. Maybe they will some time

down the line, but this data and the data that's come in lately

has just reinforced the strength of the US economy."

Cornacchioli also pointed to strong earnings reports as a boost

for equities on Thursday.

Taiwan Semiconductor Manufacturing, the world's main

maker of advanced AI chips, posted record profits ahead of

expectations. It warned that future income might be hit by U.S.

tariffs, though perhaps not until the fourth quarter. Also, GE

Aerospace lifted its profit outlook with jet engine deliveries

rising as efforts to fix supply constraints showed results.

After four straight days of losses, Europe's STOXX 600

index ended up 0.96%, with a boost from strong earnings reports

including record orders at Swiss engineering firm ABB.

MSCI's gauge of stocks across the globe

rose 5.29 points, or 0.57%, to 926.40, putting it closer to its

recent record levels.

And Wall Street followed Europe higher but at a more modest pace

with boosts including PepsiCo PEP.O which rallied more than 7%

after reporting better-than-expected quarterly results on steady

demand in the U.S. and major markets, including Europe. In

another positive sign for the consumer, United Airlines UAL.O

shares rose after executives said the company has seen strong

bookings in the past three weeks.

At 02:34 p.m., the Dow Jones Industrial Average was

up 265.33 points, or 0.60%, at 44,520.11, the S&P 500

rose 35.40 points, or 0.57%, to 6,299.10, which would be a

record closing high, and the Nasdaq Composite climbed

163.94 points, or 0.79%, to 20,893.99, hitting fresh record

highs.

Thursday's market gains follow a dramatic wobble during the

prior session when Trump said he was highly unlikely to fire

Federal Reserve chair Jerome Powell. However, he left the door

open to the possibility of ousting him and renewed his criticism

of the central bank chief for not cutting U.S. interest rates.

In currencies, the dollar rose on Thursday after the economic

data. The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

rose 0.39% to 98.73.

The euro was down 0.42% at $1.1585. Against the Japanese

yen, the dollar strengthened 0.58% to 148.72 as polls

showed Prime Minister Shigeru Ishiba's coalition was in danger

of losing its majority in the upper house in upcoming

elections.

U.S. Treasury yields were higher in a relatively choppy session.

Yields had briefly spiked higher and then fallen following the

sales and jobless claims data, which showed the world's largest

economy on a stable footing and supported the Fed's patient

stance on monetary easing.

"Consumers did not react to the tariff announcements or the

resultant decline in financial markets or the weakness in

business and consumer sentiment with defensive recoil. Instead,

they went out and bought big ticket items with an opportunistic

view," wrote Tom Simons, chief U.S. economist, at Jefferies in

an email after the retail sales data.

The yield on benchmark U.S. 10-year notes rose

0.4 basis points to 4.459%, from 4.455% late on Wednesday while

the 30-year bond yield fell 0.4 basis points to

5.0114% from 5.015%.

The 2-year note yield, which typically moves in

step with interest rate expectations for the Federal Reserve,

rose 3 basis points to 3.915%, from 3.885% late on Wednesday.

Oil prices settled higher after drones struck Iraqi

Kurdistan oil fields for a fourth day, pointing to continued

risk in the volatile region.

U.S. crude settled up 1.75%, or $1.16 at $67.54 per

barrel and Brent settled at $69.52 a barrel, up 1.46%,

or $1.00 at $67.54.

"Some of the gains are reaction to drone attacks in Iraq,"

said Andrew Lipow, president of Lipow Oil Associates. "It shows

how vulnerable oil supplies are to attacks using low

technology."

Gold prices were lower after the upbeat U.S. economic data

aided the Fed's cautious stance on rate cuts.

Spot gold fell 0.26% to $3,337.49 an ounce. U.S. gold

futures fell 0.38% to $3,339.90 an ounce.