* Investors focus on U.S. fiscal risks, Greek uncertainty * Euro down, dollar falls versus yen NEW YORK, Nov 28 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.
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