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GLOBAL MARKETS-Euro eases on Greece worries; oil slips

Published 03/08/2010, 01:06 PM
Updated 03/08/2010, 01:08 PM
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* U.S., European stocks little changed

* World stocks upbeat after last week's US jobs data rally

* Euro sheds gains after Greece's prime minister comments

* U.S. bonds softer ahead of auction (Updates with midday prices, quotes)

By Manuela Badawy

NEW YORK, March 8 (Reuters) - The euro surrendered gains on Monday as worries about Greece resurfaced and oil slipped as the dollar rose, while U.S. and European equities were 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 surrendered earlier gains after 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. [ID:nWEN1396]

The euro had risen earlier after French President Nicolas Sarkozy hinted at plans to support debt-stricken Greece.

"It's Greek jitters," said BNY Mellon currency senior strategist Michael Woolfolk. "The Greek prime minister is probably behind the move."

U.S. stocks were little changed after last week's rally that saw the Nasdaq close at an 18-month high after data showing U.S. employers cut fewer jobs than expected.

Hopes stirred by AIG's sale of a unit and McDonald's upbeat sales were offset by falling health-care shares after President Barack Obama's criticism.

U.S. stocks were flat with the Dow Jones industrial average <.DJI> at 10,556.90. The Standard & Poor's 500 Index <.SPX> was unchanged at 1,138.37, while the Nasdaq Composite Index <.IXIC> was up 0.19 percent at 2,330.66.

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> was up 0.39 percent supported by global recovery optimism.

In midday New York trade, the euro was little changed at $1.3621. The dollar index <.DXY>, a non-traded calculation of the dollar's performance against a basket of currencies, was flat at 80.458.

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.[ID:nWEQ003830]

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 future, while emphasising it was not in an emergency now. [ID:nLDE62720V]

On Sunday French President Nicolas Sarkozy promised that euro zone countries would help Greece if its financial problems worsened and vowed a crackdown on market speculators. [ID:nPAB008209]

Crude oil prices shed gains later on Monday to trade 0.3 percent lower to $81.26 a barrel and 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 traded 6/32 lower in price to yield 3.70 percent, up from a close of 3.69 on Friday.

Japan's Nikkei <.N225> gained more than 2 percent to close at a 6-week high. (Additional reporting by Ryan Vlastelica and Nick Olivari in New York; Editing by Leslie Adler)

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