* Stocks had dipped as lenders failed to reach pact on
* Brent oil jumps $1/brl on clashes between Gaza and Israel
By Ryan Vlastelica
NEW YORK, Nov 21 World shares edged slightly
higher on Wednesday as policymakers in Europe reassured markets
that a deal on releasing emergency aid to Greece was close,
though the failure of lenders to come to an agreement on their
own kept investors cautious.
Euro zone finance ministers, the International Monetary Fund
and the European Central Bank will gather again Monday after
nearly 12 hours of talks failed to produce a consensus on how to
bring Greece's debts down.
After the meeting ended, French Finance Minister Pierre
Moscovici said a deal was just "a whisker away," while European
paymaster Germany said a plan to provide Greece with funding
until 2016 was being developed.
Shares in Europe rebounded from early losses. The
FTSEurofirst 300 index of top shares rose 0.2 percent
while the Euro STOXX 50 rose 0.3 percent after
dropping by that amount earlier.
"European exchanges themselves are doing okay, so investors
are saying 'we didn't really expect a resolution (on Greece),'
just kind of learning to live with it," said Peter Jankovskis,
co-chief investment officer at OakBrook Investments LLC in
U.S. stocks were modestly higher Wednesday, ahead of a
national holiday Thursday for Thanksgiving. The Dow Jones
industrial average was up 39.05 points, or 0.31 percent,
at 12,827.56. The Standard & Poor's 500 Index was up 2.29
points, or 0.17 percent, at 1,390.10. The Nasdaq Composite Index
was up 7.60 points, or 0.26 percent, at 2,924.28.
Stocks in the U.S. also moved on the latest data, including
weekly jobless claims that met expectations and a final read on
November consumer sentiment that was below forecasts.
The benchmark 10-year U.S. Treasury note was
down 6/32, with the yield at 1.6882 percent.
The euro was flat at $1.2822, also rebounding from
earlier weakness of as much as 0.5 percent.
Prices for German debt, the safest in the euro zone, had
eased slightly, sending 10-year yields down modestly to 1.44
However, a sale of 3.25 billion euros ($4.2 billion) of new
German 10-year debt, which paid an interest rate of 1.5 percent,
drew solid demand from investors worried about the outlook.
World equity markets had come under pressure before the Greek
impasse by a warning Tuesday from Federal Reserve Chairman Ben
Bernanke that the central bank lacked the tools to cushion the
impact of a potential U.S. fiscal crisis.
Bernanke said worries over fiscal negotiations, aimed at
preventing a series of mandatory tax increases and spending cuts
early next year, had already damaged growth in the world's
His comments snapped a two-day rally on Wall Street Tuesday,
but the MSCI world equity index later rose 0.2
Asian shares had initially fallen in reaction to the Greek
aid payment delay, but recovered to close with small gains due
to a rise in mainland Chinese markets and in Tokyo.
MSCI's broadest index of Asia-Pacific shares outside Japan
gained 0.2 percent, while Japan's Nikkei stock
average closed up 0.9 percent at a two month-high.
The Nikkei's gains came as shares of exporters rose, after
the yen hit a seven-month low against the dollar, on
expectations a new government will aggressively push the Bank of
Japan to expand monetary stimulus.
Japan's opposition Liberal Democratic Party, tipped to win
next month's general election, also promised to boost spending
as it emerged that exports had fallen in annual terms for a
fifth straight month in October.
The yen rose 0.8 percent to the dollar, bouncing off
its weakest level since early April. The U.S. dollar was
flat against a basket of currencies, while Brent crude
rose 1 percent.
Oil strengthened in the wake of an explosion on a bus in Tel
Aviv, Israel, on fears that clashes between Gaza and Israel
could lead to a wider regional conflict that would disrupt oil
"There are opposing forces where the uncertainty in Europe
and the United States meets with the bullish uncertainty in the
Middle East ... so I think we're going to see a volatile
market," said Jeremy Friesen, commodity strategist at Societe
Generale in Hong Kong.