U.S. dollar down, markets eye Greece

By Manuela Badawy

NEW YORK (BestGrowthStock) – The euro rose slightly against the U.S. dollar on Monday as concerns about Greece’s indebtedness eased, while U.S. equities ended little changed after last week’s rally.

U.S. Treasuries fell as investors prepared to absorb $74 billion in debt scheduled to be auctioned this week and after Friday’s better-than-expected jobs report buoyed hopes for an economic recovery and curbed a safe-haven bid.

The euro was flat to slightly higher against the dollar in late New York trade, recouping losses incurred earlier in the day and boosted by comments on Sunday from French President Nicolas Sarkozy hinting on plans to support debt-stricken Greece.

“Sarkozy giving a thumbs up to the euro and an EU backing for Greece gave us a better bid tone before we started the market this morning,” said Dean Popplewell, chief currency strategist, at OANDA in Toronto.

“But with the lack of North American data, especially after last Friday’s surprising U.S. employment report, the market is sitting back and digesting the comments out of Europe, especially from Papandreou.”

Greek Prime Minister George Papandreou said that Athens was not asking Europe to rush to the “aid of a reckless country” by helping Greece deal with its budget problems. And he warned the crisis could cause a domino effect, driving up borrowing costs for other countries with large deficits.

U.S. stocks (Read more about the stock market today. ) closed little changed after last week’s rally, though technology shares pushed the Nasdaq higher.

The Nasdaq racked up an 18-month closing high, led by gains in BlackBerry maker Research in Motion (RIM.TO: ) (RIMM.O: ) and Cisco Systems (CSCO.O: ).

The broad S&P 500 finished just below the break-even mark, halting a six-day run-up.

The Dow Jones industrial average (.DJI: ) slipped 0.13 percent to end unofficially at 10,552.52. The Standard & Poor’s 500 Index (.SPX: ) was off just 0.02 percent, to finish unofficially at 1,138.50. The Nasdaq Composite Index (.IXIC: ) added 0.25 percent, to close unofficially at 2,332.21.

Hopes stirred by AIG’s (AIG.N: ) sale of a unit and McDonald’s (MCD.N: ) upbeat sales were offset by falling health-care shares after President Barack Obama’s criticism.

European shares closed slightly lower as pharmaceutical stocks were hit, offsetting gains in oil majors on strong crude prices during the European session.

The FTSEurofirst 300 (.FTEU3: ) index of top European shares closed 0.1 percent lower at 1,053.15 points. The index hit a six-week high on Friday and is up 63 percent since hitting a record low last March.

World stocks, however, were at their highest in six weeks on Monday on improved confidence in the U.S. economy.

MSCI’s all-country world stock index (.MIWD00000PUS: ) rose 0.43 percent supported by global recovery optimism.

The euro rose 0.05 percent at $1.3628. The dollar index (Read more about the global trade. ) (.DXY: ), a non-traded calculation of the dollar’s performance against a basket of currencies, was flat at 80.446.

Against the yen, the euro was also little changed at 123.00 yen, after having hit a two-week high earlier on Monday.

Papandreou on Monday also urged the Group of 20 leading developed and emerging economies to take the lead in efforts to rein in market speculators, warning that failing to do so could trigger another global financial crisis.

German Chancellor Angela Merkel also commented on Greece’s indebtedness and backed the idea of a European Monetary Fund and left open the possibility of helping Greece in the future, while emphasizing it was not in an emergency now.

On Sunday France’s Sarkozy promised that euro zone countries would help Greece if its financial problems worsened and vowed a crackdown on market speculators.

Crude oil prices ended higher in light volume to settle up 0.45 percent at $81.87 a barrel while copper reverted course to trade 0.4 percent lower at $338.75 due to lack of liquidity and with fund money exaggerating price moves.

In the U.S. government debt market benchmark 10-year notes ended 8/32 lower in price to yield 3.71 percent, up from a close of 3.69 on Friday.

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(Additional reporting by Gertrude Chavez-Dreyfuss; Editing by Leslie Adler)

U.S. dollar down, markets eye Greece