(Corrects name in paragraph 6 to Yingst)
* Europe bond proposal lifts risk appetite across markets
* Stocks, euro gain on hopes debt crisis to be resolved
* U.S. debt prices falter as safe-haven appeal eases
* Many investors still see Greek default despite EU effort (Updates prices)
By Herbert Lash
NEW YORK, Sept 14 (Reuters) - Global equities and the euro gained on Wednesday as optimism over tentative steps to resolve Europe's debt crisis overcame still widespread fears that Greece will ultimately default on its debt.
Comments by Europe's top bureaucrat that plans for a common euro zone bond, seen by many as a key tool to ease the region's debt crisis, would soon be presented gave equity markets on both sides of the Atlantic and the euro an early boost.
Creation of such a bond would give the weaker countries in the euro zone access to cheaper funds, although Germany has consistently opposed such a move. [ID:nLDE78D03R]
The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed up 1.4 percent at 913.22, while stocks on Wall Street gained more than 1 percent in afternoon trade.
"The focus today seems to be on whether or not Greece defaults and the market is anticipating that the can will again be kicked down the road, avoiding a default," said Clark Yingst, chief market analyst at Joseph Gunnar & Co in New York.
"Still, the market is fluctuating intraday on the uncertainty related to the issue," Yingst said.
Jose Manuel Barroso, president of the European Commission, acknowledged as much, saying Europe was facing its most serious challenge in a generation, but there was no simple solution.
The Dow Jones industrial average <.DJI> was up 136.72 points, or 1.23 percent, at 11,242.57. The Standard & Poor's 500 Index <.SPX> was up 13.87 points, or 1.18 percent, at 1,186.74. The Nasdaq Composite Index <.IXIC> was up 33.80 points, or 1.33 percent, at 2,565.95.
The euro's tepid gains suggested a clear outcome to the
European debt crisis was still not in hand. The currency rose
0.3 percent against the dollar to $1.3726
The path of least resistance is still lower until Europe pulls a rabbit from the hat and resolves the debt issue, said Troy Buckner, managing principle at hedge fund NuWave Investment Management in Parsippany, New Jersey.
While equities have posted modest gains in recent days, key commodity markets have failed to participate, he said.
"For the moment at least, our strategies are pointing to 'risk off' in both commodity and stock markets," Buckner said.
Copper prices slipped and gold fell as volatile prices hurt the precious metal's safe-haven appeal.
Benchmark copper
Brent crude rose as investors hoped Europe was closer to easing the region's debt crisis, while data showing an increase in U.S. product inventories dragged down U.S. futures.
Brent crude
The benchmark 10-year U.S. Treasury note