REFILE-GLOBAL MARKETS-Stocks, euro recover on Boehner comments

Wed Nov 28, 2012 7:20pm GMT

* Investors focus on U.S. fiscal risks, Greek uncertainty
    * Euro down, dollar falls versus yen

    NEW YORK, Nov 28 (Reuters) - U.S. and European stocks
rebounded to post gains and the euro pared losses on Wednesday
as investors shifted into buying modes after positive news on
U.S. federal budget talks.
    U.S. House Speaker John Boehner, an Ohio Republican, said he
is willing to put revenues on the table if accompanied by
spending cuts, but he repeated his opposition to raising income
tax rates. 
    Boehner's comments came as U.S. indexes were marking session
lows, and produced a sharp turnaround that reverberated through
other markets, including the euro, which also pared declines. 
    Investor caution remained over the plan agreed to late
Monday by international lenders to reduce Greece's debts but for
now investors were more focused on the positive news. The Greek
deal opened the way for more aid to Athens to avoid a chaotic
default, but details remain unclear and analysts worry it will
not do enough to make Greece's debt viable.
    Prices of riskier sovereign debt of Italy and Spain bounced
sharply, in part due to hedge funds taking profits on previous
short positions following the Greece deal. 
    U.S. stock markets have been a prisoner of the shifting
winds in Washington in recent weeks. The equity market has been
under pressure following the re-election of President Obama due
to concerns about the impact on the economy of the planned
package of tax increases and spending cuts known as the "fiscal
cliff".  
    "Anything that points to a deal happening is going to be
good for the market right now. Anything that points to a deal
falling apart is going to be bad for a market. We are becoming
myopically focused on this one issue, and I think that continues
for a while longer," said Stephen Massocca, managing director at
Wedbush Morgan in San Francisco.
    On Tuesday, stocks declined after U.S. Senate Majority
Leader Harry Reid, a Nevada Democrat, expressed disappointment
over the progress of talks between Democrats and Republicans on
avoiding the so called "fiscal cliff". 
    But President Barack Obama said on Wednesday he hopes he and
Congress can reach agreement to avoid the "fiscal cliff" and
shrink the budget deficit before Christmas, and urged supporters
to press lawmakers to agree to a deal. [ID:nL1E8MS78S}.   
    The Dow Jones industrial average was up 70.19 points,
or 0.55 percent, at 12,948.32. The Standard & Poor's 500 Index 
 was up 4.88 points, or 0.35 percent, at 1,403.82. The
Nasdaq Composite Index  was up 10.50 points, or 0.35
percent, at 2,978.29.     
    The MSCI index of global stocks was up 0.1
percent. The FTSEurofirst300 index of European stocks
was up 0.2 percent.
    
    EURO SLIPS
    In currency markets, the euro was down 0.1 percent to
$1.2934 as some traders bet recent gains made in the run up to
the Greek deal were too far, too fast. 
    "The uncertainty brought by this (Greek deal) approach makes
European assets, including the euro, vulnerable to global growth
risks," Barclays Capital analysts said in a note. "For that
reason we think the European muddle through amplifies the
market's response to the fiscal cliff discussion in the U.S." 
    But 10-year Italian government bond yields fell to their
lowest since February 2011, however, and Spain's
benchmark 10-year note went to its lowest in a month
. 
    The benchmark 10-year U.S. Treasury note was up
6/32, with the yield at 1.6165 percent.
 
    In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan fell 0.4 percent. 
    Commodity markets remained focused on the negative news and
how a possible U.S. budget crisis could tip the world's biggest
economy into recession.
    Gold fell for a third straight day, copper 
dropped from a three-week high and Brent crude fell to
around $109 per barrel.   
    U.S. crude oil futures fell 1.0 percent to $86.23.
    "There is bearish sentiment caused by problems in U.S.
negotiations, with the fiscal cliff still looming," said Filip
Petersson, analyst at SEB in Stockholm.