* Investors focus on U.S. fiscal risks, Greek uncertainty * Euro down, dollar falls vs yen NEW YORK, Nov 28 U.S. and European stocks and the euro recovered from early losses on Wednesday as investors shifted into buying mode after positive news on U.S. federal budget talks. U.S. House Speaker Republican John Boehner of Ohio 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. European stocks were still lower, as investor caution remained over the plan agreed to late Monday by the European Union, European Central Bank and the International Monetary Fund to reduce Greece's debts. The 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. However, 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 in recent weeks following the re-election of President Obama due to concerns about impact on the economy of the planned package of tax rises 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, Democrat Harry Reid of Nevada, expressed disappointment over the progress of talks between Democrats and Republicans on avoiding the so called "fiscal cliff". Chief executives from top U.S. corporations, including Goldman Sachs, Deloitte LLP, and Caterpillar Inc, will meet with President Barack Obama on Wednesday to discuss U.S. fiscal problems, the White House said. U.S. economic data published on Wednesday also dampened sentiment. New U.S. single-family home sales fell slightly in October and the government revised sharply lower its estimate for the prior month's sales, casting a shadow over what has been one of the brighter spots in the U.S. economy.. The Dow Jones industrial average was up 27.36 points, or 0.21 percent, at 12,905.49. The Standard & Poor's 500 Index was up 0.29 points, or 0.02 percent, at 1,399.23. The Nasdaq Composite Index was down 0.82 points, or 0.03 percent, at 2,966.97. The FTSEurofirst300 index of European stocks was up 0.2 percent. "We have some aftermath effects of the Greek deal with investors probably reconsidering some of their optimism and focus is also shifting to the U.S. fiscal cliff issue," said Joost Beaumont a senior economist at ABN Amro In London. Adding to investor caution was news that Fitch Ratings could strip France of its triple-A credit status next year if the country fails to meet its targets on debt reduction and its economy performs worse than forecast.. EURO SLIPS In currency markets, the euro was down 0.3 percent to $1.2907 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." European Central Bank economic data added to the uncertainty, showing depositors continued to pull money out of Spanish and Italian banks in October, despite ECB President Mario Draghi's conditional promise in September to help troubled euro zone countries. Ten-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 5/32, with the yield at 1.6199 percent. COMMODITY SLIDE In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 percent. The MSCI index of global stocks was down 0.2 percent. Commodity markets reflected the worries of a possible U.S. budget crisis and how this 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 below $109 per barrel. U.S. crude oil futures fell 1.0 percent to $86.32. "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.
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