GLOBAL MARKETS-Stocks hit record highs; Treasury yields fall after US data

By Caroline Valetkevitch and Alun John

NEW YORK/LONDON, Feb 10 (Reuters) - Major stock indexes mostly rose on Tuesday, with a world equity index and the Dow Jones industrial average hitting record highs, while Treasury yields fell after U.S. data suggested the economy may be softening.

The Commerce Department said retail sales were unchanged in December, below a forecast by economists polled by Reuters for a rise of 0.4%, and below the unrevised 0.6% increase in November. Some investors say weaker data could allow the Federal Reserve more cushion to cut interest rates.

Earlier, the Nikkei 225 .N225 hit a fresh peak again in the wake of Prime Minister Sanae Takaichi's decisive weekend election victory in Japan. The yen also strengthened further following the election.

The dollar traded mostly lower against major currencies following the U.S. data and as U.S. Commerce Secretary Howard Lutnick said he views the weaker dollar to be at a "more natural" level to promote U.S. exports and expand economic growth.

On Wall Street, investors digested the economic news and the latest quarterly results from companies. Shares of Marriott International MAR.O rose more than 8% after fourth-quarter results.

"Yields are moving lower. That and the combination of earnings... is what is causing this enthusiasm and some momentum buying" in stocks, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Key this week will be the January U.S. employment report on Wednesday, he said.

The Dow Jones Industrial Average .DJI rose 301.92 points, or 0.60%, to 50,437.56, the S&P 500 .SPX rose 12.10 points, or 0.18%, to 6,977.10 and the Nasdaq Composite .IXIC rose 26.58 points, or 0.11%, to 23,265.04.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 4.02 points, or 0.38%, to 1,057.99, and hit a record earlier. The pan-European STOXX 600 .STOXX index fell 0.07%.

While tech stocks around the world, especially software names, sold off last week on fears they could be upended by artificial intelligence tools, they have since found something of a footing.

The Nikkei jumped 2.3%, rising for a third consecutive day. Japanese stocks had been expected to benefit from a Takaichi victory given her plans for fiscal stimulus. But more surprisingly, Japanese government bonds and the yen, which had been expected to suffer, have rallied this week, seemingly on hopes that political stability and the stimulus will boost growth and drive investor optimism. FRX/ JP/

Against the Japanese yen JPY=, the dollar weakened 1.09% to 154.17.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.18% to 96.78, with the euro EUR= down 0.1% at $1.1901.

The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB fell 5.3 basis points to 4.145%, on track for its fourth straight day of declines. The yield has dropped more than 13 basis points over that timeframe, its biggest four-day drop since mid-October.

White House economic adviser Kevin Hassett said on Monday job gains could be lower in the coming months as the Trump administration's immigration policies slow labour growth and new AI tools boost productivity.

Other areas of recent market stress were calmer on Tuesday. British government bonds slightly outperformed peers, having lost ground on Monday as Prime Minister Keir Starmer came under increasing pressure. GB/

In commodities markets, spot gold XAU= fell 0.66% to $5,031.18 an ounce. U.S. crude CLc1 fell 0.68% to $63.92 a barrel and Brent LCOc1 fell to $68.74 per barrel, down 0.43% on the day.