GLOBAL MARKETS-Greek deal boosts euro, oil; stocks edge up

NEW YORK (Feb 9): The euro hit a two-month high against the dollar on Thursday after Greece agreed to an austerity
package in exchange for new funds, but questions about whether the deal will be enough to avoid a messy default curbed
stocks' gains.
News that Greek leaders had clinched a long-stalled deal just hours before a key meeting with the country's financial backers
encouraged investors to take on some risk, driving down prices of safe-haven U.S. Treasuries.
Oil rallied more than 1 percent on the austerity agreement, which is crucial for Greece to receive a 130 billion euro ($172
billion) bailout from the European Union and the International Monetary Fund.
Still, investors wondered whether Greece's promises will be enough to secure the funds, as well as what contribution the
European Central Bank will offer in the restructuring of Greek debt.
"There is still a fair amount of skepticism that these agreements won't amount to action, given the history," said Jack Ablin,
chief investment officer at Harris Private Bank in Chicago. "The market's taking a wait-and-see approach."
Adding to the uncertainty, euro zone finance ministers arriving for bailout talks in Brussels warned there would be no
immediate green light for the rescue package.
First, Greece will have to prove itself by making good on past promises that have never been implemented, they said. On
Wall Street, investors seemed tempted to take some profits after weeks of gains, keeping a lid on key stock indexes.
"There is definitely a whiff of 'sell the news' in the air," said Michael Marrale, managing director and head of sales trading at
RBC Capital Markets in New York.
"We've climbed this wall of worry and the first reaction for people is to hit the sell button."
The Dow Jones industrial average edged up 6.51 points, or 0.05 percent, at 12,890.46, while the Standard & Poor's 500
Index finished up 1.99 points, or 0.15 percent, at 1,351.95. The Nasdaq Composite Index rose 11.37 points, or 0.39 percent,
to 2,927.23.
In Europe, the FTSEurofirst 300 index index of top shares closed 0.25 percent higher, with cyclical shares such as those of
automakers were in high demand. "The market has potential to go up further. Economic support is there and earnings are
continuing to do well," said Anko Beldsnijder, managing director at MainFirst Asset Management, which manages 1 billion
euros ($1.33 billion).
World stocks measured by the MSCI All-Country World Index gained 0.12 percent. EURO GAINS The euro strengthened 0.2
percent to $1.328, after hitting a two-month high of $1.332.
Also supporting the European common currency were comments from ECB President Mario Draghi, who said the zone's
outlook, while uncertain, had stabilized.
"That poured a little cold water on expectations of a March rate cut," said Adnan Akant, head of foreign exchange at Fischer
Francis Trees & Watts, with $48 billion in assets.
Benchmark 10-year U.S. Treasury notes fell 15/32 in price, which took their yield up to 2.04 percent from 1.98 percent late on
Wednesday. Lower-than-expected claims for unemployment benefits added to the perception that the U.S. labor market is
improving, also reducing the appeal of Treasuries.
Prices of 30-year Treasuries fell one point, taking the yield up to 3.20 percent. They trimmed part of their losses in the
afternoon, after a well-bid auction of 30-year bonds. U.S. crude oil prices rose 1.14 percent to $99.84 a barrel, after rising to
more than $100 in the third day of gains. - Reuters