GLOBAL MARKETS-Wall St stocks weak while Europe rallies; dollar rises

* Sterling surges on British retail sales

* Wall Street edges lower as Intel (Berlin: INL.BE - news) , GE weigh after results

* European shares extend new-year rally

By Angela Moon

NEW YORK (Frankfurt: HX6.F - news) , Jan 17 (Reuters) - A measure of global equity markets was little changed on Friday as another weak day on Wall Street following corporate earnings offset gains in European equities, while the dollar rose after economic data kept alive expectations that the Federal Reserve will continue to cut back its stimulus.

In Europe, stocks rose in brisk volumes, extending their new-year rally as expectations of a pick up in global growth prompted investors to buy into cyclical mining stocks.

A strong British retail sales figure shook the pound out of a week-long torpor on Friday while the New Zealand dollar was the biggest faller among major currencies, halting a run to nine-month highs.

On Wall Street, Intel and General Electric (Swiss: GE.SW - news) were among the biggest decliners. Shares of Intel Corp lost 4.7 percent to $25.29, weighing on all three major U.S. indexes after the chipmaker's fourth-quarter earnings missed expectations by a penny and the company gave a lukewarm forecast for revenue for the current quarter.

General Electric Co lost 2.8 percent to $26.44. The conglomerate posted a slightly better-than-expected rise in quarterly revenue, propelled by its oil pumps and jet engines businesses, but its full-year profit margins were disappointing.

The Dow outperformed the broader S&P 500 index as American Express (NYSE: EXPR - news) climbed 4.9 percent to $92.06 after reporting strong quarterly results late on Thursday.

"The market is frustrated at the moment, there is no reason to push higher," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.

"There are mixed earnings, and even the ones that are coming in stronger people are taking advantage and using those as sources of cash, so they are taking some money off the table, which is just holding us here."

The dollar rose after a round of mixed U.S. data that overall supported the view the world's largest economy was steadily gaining steam, keeping the Federal Reserve on track to continue to reduce its stimulus.

In late morning trading, the euro fell 0.4 percent against the dollar to $1.3566, after earlier touching a six-day low of $1.3554.

The dollar index, a gauge of the dollar's value versus six major currencies, rose 0.2 percent to 81.056.

Data showed U.S. industrial output rose at its fastest clip in 3-1/2 years in the fourth quarter. Separately, ground-breaking for new homes last month dropped 9.8 percent, the largest percentage decline since April, though housing starts were coming off a multi-year high in November.

"Overall, the U.S. economy is making steady, if uneven, progress and that should keep intact expectations for sustained Fed tapering this year," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

"U.S. Treasury yields haven't budged much, so as long as they hold near their elevated levels, that should continue to underpin the dollar."

U.S. Treasuries prices slipped as the housing and industrial production data came in largely as expected and with trading volumes light before a long holiday weekend.

Benchmark 10-year notes were last down 2/32 in price to yield 2.854 percent, up from 2.845 percent late on Thursday.

In the currency market, the British pound was one of the biggest movers of the day, rising 0.55 percent to $1.6443 following UK retail sales data.

British retail sales spiked 2.6 percent in December to show an annual rise in volumes of 5.3 percent, the fastest growth since October 2004, Office of National Statistics data showed on Friday.

"We were contemplating a test of support for the pound at $1.6320. In the end we got this stonking number which provoked a genuine reaction," said Daragh Maher, strategist with HSBC in London.

Stocks also rose in the region as gains in consumer cyclicals helped the broad FTSEurofirst 300 index, which was up 0.5 percent at 1,343.90 points. The benchmark touched its highest levels since mid-2008.

The region's quarterly earnings season does not really start until next week. STOXX Europe 600 companies are seen missing consensus by 0.4 percent on revenues and by 0.9 percent on earnings, according to StarMine SmartEstimates, which focus on the predictions by the most accurate analysts.

The MSCI all-country world index was down 0.1 percent.

On Wall Street, the Dow Jones industrial average was up 45.05 points, or 0.27 percent, at 16,462.06. The Standard & Poor's 500 Index was down 2.43 points, or 0.13 percent, at 1,843.46. The Nasdaq Composite Index was down 10.00 points, or 0.24 percent, at 4,208.68.

In commodities, Brent crude oil reversed early losses to trade above $106 a barrel, rebounding off a two-month low as traders assessed the likelihood of a sustained recovery in supply from Libya.

Brent crude for March delivery, which became the front-month contract following the expiry of the February contract on Thursday, rose 28 cents to $106.03 a barrel, bouncing off a two-month low of $105.44. Front-month Brent is on course for a weekly decline of around 1 percent.