Euro, U.S. stocks up on Greece aid plan

By Jennifer Ablan and Emelia Sithole-Matarise

NEW YORK/LONDON (BestGrowthStock) – The euro rose broadly on Friday while U.S. stocks (Read more about the stock market today. ) opened higher as euro zone leaders agreed to set up a joint financial safety net with the IMF to help debt-ridden Greece.

In morning trading in New York, the euro was up 0.9 percent against the dollar at $1.3397, recovering after hitting its weakest level since early May at $1.3268, according to Reuters data.

Late Thursday, euro zone leaders agreed that Athens would receive coordinated bilateral loans from other countries that use the euro and money from the International Monetary Fund if it faced severe difficulties.

Greek government bonds outperformed euro zone benchmark Bunds, narrowing the gap between their yields by 12 basis points on the day to 309 bps. The cost of protecting against a Greek government debt default also fell.

“The fact that there will be a mechanism in place reduces the risk of the euro zone breaking up,” said Johan Javeus, currency strategist at SEB in Stockholm. “But going forward the market will be focusing more on whether Greece will be able to deliver the austerity measures it has promised.”

At around 10:15 a.m. EDT, the Dow Jones industrial average (.DJI: ) was up 51.24 points, or 0.47 percent, at 10,892.45, while the Standard & Poor’s 500 Index (.SPX: ) was up 6.56 points, or 0.56 percent, at 1,172.29. The Nasdaq Composite Index (.IXIC: ) was up 13.19 points, or 0.55 percent, at 2,410.60.

Conversely, the dollar was down against a basket of major trading-partner currencies, with the U.S. Dollar Index (.DXY: ) down 0.51 percent at 81.703 from a previous session close of 82.120. Meanwhile, the euro advanced 0.8 percent to 124.03 yen.

Investors have been concerned about stability in the euro zone on the back of the ongoing Greek troubles and a downgrade this week of Portuguese debt. There has also been renewed market focus on debt woes in Dubai.

LINGERING DOUBTS

Under pressure from the Greek debt crisis, the euro has fallen around 12 percent versus the dollar since early December, when it was trading above $1.51.

James Moore, an analyst at TheBullionDesk.com, said issues with Dubai and Portugal this week have been a stark reminder of the huge debt problems facing many of the world economies that will continue to overshadow market risk appetite for months.

In that regard, the pan-European FTSEurofirst 300 (.FTEU3: ) index of shares dipped 0.43 percent at 1,078.23 points, while the Nikkei 225 Index (.N225: ) managed to advance 1.55 percent to 10,996.37.

Asian share markets advanced but European shares fell from 18-month highs with analysts saying a correction may be due as equities become fully valued and the risk of higher interest rates intensify.

Back in the U.S., the American consumer sentiment ended unchanged in March from February, a survey released on Friday showed, while the reading slightly beat expectations.

After a miserable week for U.S. Treasuries following after a deluge of new government issues, the market was up on Friday on value-buying.

The benchmark 10-year U.S. Treasury note was up 1/32, with the yield at 3.88 percent, while the 2-year U.S. Treasury note was up 1/32, with the yield at 1.06 percent.

At the longer end of the yield curve, the 30-year U.S. Treasury bond was up 1/32, with the yield at 4.76 percent.

In energy and commodities prices, U.S. light sweet crude oil fell 10 cents, or 0.12 percent, to $80.43 per barrel while spot gold prices rose $5.75, or 0. 53 percent, to $1096.60. The Reuters/Jefferies CRB Index (.CRB: ) was up 0.38 points, or 0.14 percent, at 268.24.

Stock Market Today

(Additional reporting by Jessica Mortimer and Veronica Brown)

(Editing by Theodore d’Afflisio)

Euro, U.S. stocks (Read more about the stock market today. ) up on Greece aid plan