* U.S. fiscal talks the big driver of global markets
* U.S. stocks pare gains
* Euro surrenders gains vs dollar
NEW YORK, Nov 29 U.S. stocks pared gains while the euro fell on Thursday on a surge of risk aversion after top Republican lawmaker John Boehner said there had been no substantive progress in the last two weeks in talks to reach a budget deal that would avoid the "fiscal cliff."
Boehner, the speaker of the U.S. House of Representatives, said he had no idea what compromises the White House is willing to make on spending cuts, following a meeting with U.S. Treasury Secretary Timothy Geithner. He said Geithner gave no new substantive plan for finding a deal on the budget.
Boehner's comments rattled investors who had earlier driven world stocks to a three-week high alongside a rally in the euro and commodities on hopes that U.S. political leaders would reach a deal to avert a $600 billion in spending cuts and tax hikes that are seen as a threat to the U.S. economy.
"One minute the portents for a deal on the fiscal cliff are negative, the next minute they are positive. This is likely to be the pattern all the way up to the deadline on Jan. 1," said Mike Mason, a senior trader at Sucden Financial Private Clients in London.
"Equities are sure to remain volatile and trading subdued until there is any concrete outcome to these negotiations," Mason said.
The fiscal cliff is the biggest risk facing global markets in the final weeks of the year, following an agreement earlier this week on fresh aid for Greece.
The Dow Jones industrial average was up 2.15 points, or 0.02 percent, at 12,987.26. The Standard & Poor's 500 Index was up 2.65 points, or 0.19 percent, at 1,412.58. The Nasdaq Composite Index was up 11.75 points, or 0.39 percent, at 3,003.53.
The MSCI global equities index was up 0.71 percent at 331.73 points, after earlier touching its highest level since Nov. 7.
The euro was down 0.09 percent at $1.2956 from a previous session close of $1.2972.
Our top photos from the past week.