GLOBAL MARKETS-Greek deal boosts euro, oil; stocks edge up

* Greece agrees to austerity in exchange for new funds
* Euro hits $1.33, U.S. crude rises to near $100 a barrel
* Stocks investors cautious as uncertainty remains

By Walter Brandimarte
NEW YORK, Feb 9 (Reuters) - The euro hit a two-month
high against the dollar on Thursday after Greece
agreed to an austerity package in exchange for new funds, but
questions about whether the deal will be enough to avoid a messy
default curbed stocks' gains.
News that Greek leaders had clinched a long-stalled deal
just hours before a key meeting with the country's financial
backers encouraged investors to take on some risk, driving down
prices of safe-haven U.S. Treasuries.
Oil rallied more than 1 percent on the austerity agreement,
which is crucial for Greece to receive a 130 billion euro ($172
billion) bailout from the European Union and the International
Monetary Fund.
Still, investors wondered whether Greece's promises will be
enough to secure the funds, as well as what contribution the
European Central Bank will offer in the restructuring of Greek
debt.
"There is still a fair amount of skepticism that these
agreements won't amount to action, given the history," said Jack
Ablin, chief investment officer at Harris Private Bank in
Chicago. "The market's taking a wait-and-see approach."
Adding to the uncertainty, euro zone finance ministers
arriving for bailout talks in Brussels warned there would be no
immediate green light for the rescue package. First, Greece will
have to prove itself by making good on past promises that have
never been implemented, they said.
On Wall Street, investors seemed tempted to take some
profits after weeks of gains, keeping a lid on key stock
indexes.
"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 edged up 6.51
points, or 0.05 percent, at 12,890.46, while the Standard &
Poor's 500 Index finished up 1.99 points, or 0.15
percent, at 1,351.95. The Nasdaq Composite Index rose
11.37 points, or 0.39 percent, to 2,927.23.
In Europe, the FTSEurofirst 300 index index of top
shares closed 0.25 percent higher, with cyclical shares such as
those of automakers were in high demand.
"The market has potential to go up further. Economic support
is there and earnings are continuing to do well," said Anko
Beldsnijder, managing director at MainFirst Asset Management,
which manages 1 billion euros ($1.33 billion).
World stocks measured by the MSCI All-Country World Index
gained 0.12 percent.

EURO GAINS
The euro strengthened 0.2 percent to $1.328, after
hitting a two-month high of $1.332. Also supporting the European
common currency were comments from ECB President Mario Draghi,
who said the zone's outlook, while uncertain, had stabilized.
"That poured a little cold water on expectations of a March
rate cut," said Adnan Akant, head of foreign exchange at Fischer
Francis Trees & Watts, with $48 billion in assets.
Benchmark 10-year U.S. Treasury notes fell 15/32
in price, which took their yield up to 2.04 percent from 1.98
percent late on Wednesday.
Lower-than-expected claims for unemployment benefits added
to the perception that the U.S. labor market is improving, also
reducing the appeal of Treasuries.
Prices of 30-year Treasuries fell one point,
taking the yield up to 3.20 percent. They trimmed part of their
losses in the afternoon, after a well-bid auction of 30-year
bonds.
U.S. crude oil prices rose 1.14 percent to $99.84 a
barrel, after rising to more than $100 in the third day of
gains.