New York  - Major US stock indices closed higher Thursday after better-than-expected retail sales suggested the world's largest economy may yet avoid a recession.

Retail sales climbed 1 per cent in May from the previous month, according to the Commerce Department, as 130-billion-dollars worth of government tax rebates began reaching the pockets of consumers.

April's sales figure was also revised to a 0.4-per-cent increase. The department had earlier reported a 0.2-per-cent drop.

Discount retailers Wal-Mart and Target saw their share prices rise, along with electronics chain Best Buy.

The blue-chip Dow Jones Industrial Average was up 57.81 points, or 0.48 per cent, to 12,141.58. The broader Standard & Poor's 500 rose 4.38 points, or 0.33 per cent, to
1,339.87. The technology- heavy Nasdaq Composite Index gained 10.34 points, or 0.43 per cent, to 2,404.35.

The US currency climbed against the euro to 64.76 euro cents from 64.29 euro cents on Wednesday, and also gained on the Japanese currency to 107.94 yen from 106.97 yen.

Gold fell 10.90 dollars to 872.00 dollars per fine ounce. (dpa)