(Adds U.S. market open, byline, dateline; previous LONDON)
* MSCI's world index, shares on Wall Street hit new highs
* Canadian shares also hit new high
* Oil, dollar gain
By Herbert Lash
NEW YORK, Jan 16 (Reuters) - The dollar rose while key world and stock indexes on Wall Street scaled new records on Thursday as the U.S.-China trade deal, strong corporate earnings and encouraging U.S. economic data lifted equity markets.
Oil rose as the long-awaited Phase 1 trade deal brought some relief to markets, while gold prices slid below the psychological level of $1,500 an ounce as the upbeat data signaled a healthy U.S. economy.
U.S. retail sales increased for a third straight month in December and the number of Americans filing claims for unemployment benefits dropped for a fifth straight week last week, indicating the labor market remained strong. data showed a gauge of manufacturing activity in the U.S. Mid-Atlantic region rebounded in January to its highest in eight months, leading the Federal Reserve Bank of Philadelphia to call the factory outlook the brightest in more than 18 months. earnings from Morgan Stanley (NYSE:MS) and a tech rally on Wall Street added to optimism from a trade deal investors hope will ease an 18-month U.S.-Sino dispute that has roiled markets and crimped global growth.
"We believe the agreement underpins a positive outlook for risk assets, especially emerging market stocks," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
"But it is also important for investors to understand the limitations of the deal. So we see the deal as representing a partial calming rather than an end to trade tensions."
MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.33% to an all-time high, while emerging market stocks rose 0.21%.
U.S. stocks also climbed to new highs, as did Canadian shares on Bay Street in Toronto.
The Dow Jones Industrial Average .DJI rose 165.9 points, or 0.57%, to 29,196.12. The S&P 500 .SPX gained 16.61 points, or 0.50%, to 3,305.9 and the Nasdaq Composite .IXIC added 52.71 points, or 0.57%, to 9,311.41.
Technology stocks .SPLRCT provided the biggest boost on Wall Street, with Apple Inc AAPL.O up more than 0.6% and chipmakers gaining after a strong forecast from the world's top contract chipmaker TSMC 2330.TW TSM.N signaled a recovery in the sector. Philadelphia Semiconductor index .SOX climbed 1.0%.
European shares edged higher but Asia saw China's biggest stocks take a slight dip overnight. .SSEC
The pan-European STOXX 600 index .STOXX rose 0.17%.
The dollar index erased earlier losses to rise on the data.
"The data flurry was positive, particularly the Philly Fed number," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. It "reduces the probability for a recession, which was low already."
The dollar index .DXY rose 0.1%, with the euro EUR= down 0.16% at $1.1131. The Japanese yen JPY= weakened 0.23% versus the greenback at 110.17 per dollar.
Crude oil gains of more than 1% were capped after the International Energy Agency said it expected oil production to outpace demand.
Brent LCOc1 rose 70 cents to $64.70 a barrel and West Texas Intermediate CLc1 advanced 87 cents to $58.68 a barrel.
China committed to buy over $50 billion more of U.S. oil, liquefied natural gas and other energy products over two years, according to the trade deal. Treasury yields rose slightly on the strong economic data and bank earnings.
The benchmark 10-year US10YT=RR yield was up 1.2 basis points in morning trading at 1.8004%.
Central banks were active, with both Turkey and South Africa cutting their interest rates again after policy meetings.
The European Central Bank published a largely upbeat set of meeting minutes ahead of a speech from its chief, Christine Lagarde. Inflation Image
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