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GLOBAL MARKETS-Stocks gain after data, euro slips before summit
(Updates to U.S. open, changes dateline, previous LONDON)
* Hopes for progress at EU summit fade
* Euro falls for 3rd day against dollar
* Oil advances on tighter North Sea oil supply
NEW YORK, June 27 (Reuters) - Global shares edged higher on Wednesday, helped by better-than-expected U.S. economic data, but the euro slipped against the U.S. dollar before a European summit that will likely fail to produce a credible solution to the region's debt crisis.
U.S. stocks opened higher after the Commerce Department said demand for long-lasting U.S. manufactured goods rebounded more than expected in May, but slowing global growth suggest the momentum might not be sustained.
Sentiment was cautious across markets ahead of a high-stakes European Union summit on Thursday and Friday with leaders unusually divided over how to stem the spreading debt crisis, now in its third year.
Germany's Angela Merkel said total debt liability would not be shared in her lifetime, giving little support to Italian and Spanish pleas for immediate action. Rome and Madrid have seen their borrowing costs spiral to a level which for Spain at least would not be sustainable.
"This is like a slow motion car accident occurring over there and the market has certainly set this into prices," said Robert Pavlik, chief market strategist at Banyan Partners LLC in Palm Beach Gardens, Florida, about the EU summit.
The MSCI world equity index rose 0.5 percent to 302.35 points, though was still down nearly 1 percent for the week so far.
U.S. stocks rose. The Dow Jones industrial average was up 25.89 points, or 0.21 percent, at 12,560.56. The Standard & Poor's 500 Index was up 4.41 points, or 0.33 percent, at 1,324.40. The Nasdaq Composite Index was up 9.74 points, or 0.34 percent, at 2,863.80.
The euro fell for a third day against the dollar and was last down 0.2 percent at $1.2461, not far from a more than two-week low of $1.2440 on Reuters data on Tuesday.
Growing concerns that more peripheral euro zone nations will be shut out from capital markets and expectations that fiscal austerity will drag the region into a more painful recession will see the euro stay under pressure. Any bounce toward the $1.27 or $1.28 level would attract sellers, traders said.
"I am going short euro/dollar into the summit," said Stuart Frost, head of absolute returns and currency at RWC Capital, a London-based fund manager. "The euro should be a lot lower than what it is and even if there is an agreement, chances of which are very low, the currency is headed towards $1.20."
Markets had been hoping this week's summit would deliver at least a high-level agreement on greater fiscal and financial integration across the euro area that could then ultimately lead to the issuance of common euro bonds.
But Berlin has deflated expectations of any breakthrough on the idea, though it appeared ready to budge on using the euro zone's rescue funds more flexibly to help banks and reassure investors fearful of an increased risk of write-downs on government bonds.
Debt markets continue to reflect the worsening funding outlook for many euro zone nations, with investors reluctant to increase their exposure even to safe-haven debt ahead of the leaders' summit.
Italy's six-month borrowing costs rose to 2.957 percent at auction on Wednesday, their highest since December. The spike comes just ahead of a five- and 10-year debt sale for up to 5.5 billion euros on Thursday. On Tuesday, Spain saw its short-term borrowing costs nearly triple.
Better-than-expected U.S. data and tighter North Sea oil supply pushed oil prices higher. Brent crude rose 37 cents to $93.39 per barrel. U.S. crude gained 87 cents at $80.23.
Spot gold were slightly up at $1,575 an ounce.
The benchmark 10-year U.S. Treasury note was up 2/32, with the yield at 1.6211 percent. (Additional reporting by Rodrigo Campos, Ryan Vlastelica and Nick Olivari in New York and Richard Hubbard in London; Editing by Kenneth Barry)
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