GLOBAL MARKETS-World stocks flat as soft US data blamed on weather; dlr dips

* U.S. retail sales unexpectedly fall; jobless claims rise

* U.S. stocks manage gains, but Cisco falls

* European stocks dip

* Italy's Letta announces resignation after market close

* Bond prices gain

By Caroline Valetkevitch

NEW YORK (Frankfurt: HX6.F - news) , Feb 13 (Reuters) - World stock markets were nearly

flat on Thursday as soft U.S. retail sales, considered a gauge

of consumer spending, were blamed on bad weather, while the

dollar fell to a two-week low against the euro.

U.S. stocks edged higher, recovering from earlier losses.

Unseasonably cold and snowy weather hurt U.S. retail sales,

which fell unexpectedly in January. Other data showed more

Americans filed for jobless benefits last week.

Large parts of the United States have been gripped by

freezing temperatures and snow storms, which caused investors to

largely discount both the day's and other recent weak data that

suggested the economy started the year on weaker footing.

"We understand the impact the weather is having, and we

expect the economy is going to perk up when we get some more

seasonal weather in the second quarter. Autos will come back,

housing will come back," said Phil Orlando, chief equity

strategist at Federated Investors in New York.

"That's the reason why I think the S&P 500 is up right now

in the face of at least on the surface what was a disastrous

retail sales report."

On Thursday, the eastern United States was in the grip of

another deadly winter storm that began late Wednesday.

The Dow Jones industrial average rose 24.25 points,

or 0.15 percent, to 15,988.19; the S&P 500 gained 5.15

points, or 0.28 percent, to 1,824.41; and the Nasdaq Composite

added 20.667 points, or 0.49 percent, to 4,221.955.

The broad MSCI All-Country World Index was

up 0.1 percent, reversing earlier losses, while MSCI (NYSE: MSCI - news) 's index of

emerging market stocks was down 0.8 percent after

rising on Wednesday.

In Europe, shares dipped as losses in Italy weighed on the

market due to political uncertainty there that raised worries

about efforts to turn around Italy's sputtering economy.

However, after the market close, Italian Prime Minister Enrico

Letta said he would tender his resignation on Friday, opening

the way for center-left leader Matteo Renzi to take the helm.

European stocks snapped a week-long winning streak, with the

pan-European FTSEurofirst 300 index ending down 0.1

percent.

Shares of Swiss food group Nestle (VTX: NESN.VX - news) fell 1.5 percent

after the company said it may undershoot its long-term growth

targets again this year.

In the foreign exchange market, the dollar fell to a

two-week low against the euro and slid against other major

currencies, after the day's U.S. economic data. U.S. bond prices

rose following two days of losses.

The euro rallied against the dollar, to $1.3694, its

strongest level since Jan. 27, before trimming gains to trade

0.55 percent higher on the day, at $1.3681.

Benchmark 10-year Treasuries were up 9/32 in

price to yield 2.73 percent.

On Wall Street, a disappointing outlook from Cisco Systems (NasdaqGS: CSCO - news)

limited gains. Cisco shares fell 3.8 percent to $21.99.

U.S. CRUDE INCHES UP

Oil prices were mixed. Brent's losses were limited by a

report from the International Energy Agency (IEA) that developed

world inventories fell by 137 million barrels at the end of last

year, for the steepest quarterly decline since 1999.

Brent crude oil futures for March delivery, due to

expire later on Thursday, were down 8 cents at $108.71 a barrel

while U.S. crude oil was up 17 cents at $100.54.