Wall St rebounds on retailing rise (UPDATED)

Stocks on Wall Street recovered late in the session after earlier dropping on a fourth-quarter loss by drug giant Merck.

Escalating violence in Egypt and a lower euro also weighed on investor sentiment that had pushed other world markets down.

However, the US market was buoyed by strong January retail figures, which were above expectations.

The Dow Jones Industrial Average fell below 12,000 during the morning but at the close (10am NZ time) was up 0.2%, or 20.29 points, to 12,062.26.

Merck fell 2.7% after its loss and the forecast for full-year adjusted earnings fell below analysts' predictions.

The Nasdaq Composite finished 0.2% up at 2753.88, while the S&P 500 index was also up 0.2% to 1307.10.

Other markets: Europe, Asia down
European stocks fell as heightened tensions in Egypt prompted traders to tread cautiously.

Oil stocks led the declines, with Royal Dutch Shell falling 3.1% after fourth-quarter earnings fell short of analysts' forecasts. BP dropped 1.3%.

London's FTSE 100 was 0.7% lower at 5959.75, Frankfurt's DAX was down 0.3% at 7160.72 and the CAC-40 in Paris was 0.5% lower at 4047.55.

Japanese stocks declined on worries over violence in Egypt and disappointing results from blue chips such as Panasonic.

Indian shares jumped as investors shrugged off weak earnings reports to snap up beaten-down real-estate and automobile stocks.

Australian shares were led higher by insurance issues after cyclone Yasi caused less damage than feared.

Mumbai's Sensex, which had dropped more than 11% by Wednesday's close since the beginning of 2011, rose 2% to18449.31.

Japan's Nikkei Stock Average fell 0.3% to 10431.36 and Australia's S& P/ASX 200 gained 0.5% to 4820.57.

Most other Asian markets were closed for the Lunar New Year holidays.

Commodities: Oil down
Crude futures eased as the US dollar rallied. Traders remained focused on escalating violence in Egypt and the prospect of supply disruptions.

Light, sweet crude for March delivery recently fell 45USc, or 0.5%, to $US90.42 a barrel in New York. Brent crude on the ICE futures exchange shed 22USc, or 0.2%, to $US102.12 a barrel.

Currencies: Euro down, dollar up
The euro fell sharply against the US dollar after European Central Bank President Jean-Claude Trichet sounded much less hawkish about an interest-rate rise this year to combat inflation.

The dollar jumped against the yen and added to its gains against the euro.

The euro was at $US1.3630 from $US1.3810 late on Wednesday. The euro fell to 1.2950 Swiss francs from 1.2982 francs.

The euro was at ¥111.64 from ¥112.64, while the dollar was at ¥81.91 from ¥81.55.