U.S. stocks mixed on inflation data

By Herbert Lash

NEW YORK (Reuters) - U.S. stocks were mixed on Friday, as a benign reading on February inflation was offset by retail sales and consumer sentiment data that suggested a recession is near, while oil fell more than $1 amid a broad sell-off in commodities.

Longer-dated U.S. Treasury debt prices rose, aided by the favourable data on February inflation.

The dollar edged higher against the euro and Swiss franc after it neared record lows in early trading, supported at the margin by improving money market conditions that helped ease the impact of otherwise bleak U.S. economic data.

Data showing a more-than-expected rise in U.S. February personal income was offset by the smallest increase in spending since September 2006, which suggested consumption was not providing its usual support to the economy.

The euro rose as high as $1.5839, within striking distance of last week's record $1.5904, but gains were later trimmed and the dollar rebounded on the rise in U.S. personal income.

European stocks closed lower.

U.S. stocks rose on the inflation data, but the gains were trimmed on the weak retail data, including a profit warning from J.C. Penney Co (JCP.N).

The department store operator's shares fell almost 7 percent after the company cut its first-quarter earnings outlook following weak Easter sales and said it expects the environment to remain difficult throughout 2008.