World stocks held steady on Tuesday while the dollar held above this week's seven-month low against the yen as focus shifted to the state of U.S. consumers from a trade spat between the United States and China. A year after Lehman Brothers collapsed, risky assets are almost back at September 2008 levels and some G7 economies have come out of recession.

U.S. data later in the day, including retail sales and a regional manufacturing survey, is expected to reinforce expectations that the world's biggest economy is recovering.

However, given a sharp rise in stocks -- with world stocks rising 65 percent since March -- investors are reluctant to add positions significantly.

Generally, the recovery has been a bit quick and valuations are no longer attractive but have rather become appropriate, said Hans-Juergen Delp, chief strategist at Commerzbank.

MSCI world equity index was slightly up on the day, having hit an 11-month high last week. The FTSEurofirst 300 index <.FTEU3> rose 0.17 percent on the day.

Investors have been moving money out of cash, which is basically returning 0 percent, and into other asset classes. This trend still has a way to go, which should provide a tailwind for the markets as well, Bob Doll, chief investment officer for global equities at BlackRock, said in a note to clients.

Additionally, reasonable valuations, improving corporate profits and discipline around capital expenditures are all positives. Markets remain unpredictable, and a correction could still occur at any point, but we believe the path of least resistance continues to be up.

Shares fell briefly on Monday after China responded swiftly to a U.S. decision to impose special duties on Chinese tires, creating tensions ahead of a summit of G20 leaders next week.

A trade war is potentially detrimental to the global economy which is just recovering from the worst recession in decades. China is a key buyer of U.S. Treasuries and escalating tensions may damage the dollar.

Emerging stocks <.MSCIEF> rose 0.6 percent.

U.S. crude oil fell 0.4 percent to $68.56 a barrel.

The September bund futures were largely unchanged on the day.

The dollar <.DXY> was up 0.1 percent against a basket of major currencies while it rose 0.3 percent to 91.22 yen.

(Additional reporting by Christoph Steitz; Editing by Andy Bruce)

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