NEW YORK: The euro hit a two-month high against the dollar but US stocks edged lower on Thursday as investors wondered whether an austerity package agreed to by Greek policymakers will be enough to avoid a messy default by the nearly bankrupt country.
News that Greek leaders had clinched a long-stalled deal just hours before a key meeting with the country's financial backers encouraged some investors to sell safe-haven US Treasuries and buy equities, driving European indexes higher.
Oil prices rallied more than 1 percent on the deal, which is crucial to secure a 130 billion euro ($172 billion) bailout for Greece.
Still, details were scarce and investors wondered whether it will be enough to secure the funds, as well as what contribution the European Central Bank will offer in the restructuring of Greece's debt.
On Wall Street, investors seemed tempted to take profits, pushing indexes lower in early trade.
"There is definitely a whiff of sell the news in the air," said Michael Marrale, managing director and head of sales trading at RBC Capital Markets in New York. "We've climbed this wall of worry and the first reaction for people is to hit the sell button."
The Dow Jones industrial average was down 21.80 points, or 0.17 percent, at 12,862.15. The Standard & Poor's 500 Index was down 2.90 points, or 0.21 percent, at 1,347.06. The Nasdaq Composite Index was down 9.34 points, or 0.32 percent, at 2,906.52.
In Europe, the FTSEurofirst 300 index index of top shares edged up 0.02 percent. But world stocks measured by the MSCI All-Country World Index slipped 0.1 percent.
The euro jumped to $1.3321, up 0.4 percent on the day and its highest since early December. With much of the market still scurrying to cover bets against the currency, some traders said the currency could be headed for $1.35 in the short run.
Benchmark 10-year US Treasury notes fell 17/32 in price, which took its yield up to 2.04 percent. Lower-than-expected claims for unemployment benefits in the US also contributed to reduce the appeal of Treasuries.
US crude oil prices rose 1 percent to $99.72 a barrel, the third day of increases after reaching $100 earlier.
Copyright Reuters, 2012
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