* Stocks earlier fell as lenders failed to agree on Greece
* Euro and U.S. dollar flat; Japanese yen rebounds
* Brent oil edges higher on Middle East tension
By Ryan Vlastelica
NEW YORK, Nov 21 World shares advanced 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
Euro zone finance ministers, the International Monetary Fund
and the European Central Bank will gather again Monday, after
nearly 12 hours of talks overnight in Brussels failed to produce
a consensus on how to shrivel Greece's debt.
After the meeting ended, French Finance Minister Pierre
Moscovici said a deal was just "a whisker away," while European
paymaster Germany said a plan was being developed to provide
Greece with funding until 2016.
Shares in Europe rebounded from early losses. The
FTSEurofirst 300 index of top shares closed 0.3 percent
higher, while the Euro STOXX 50 recouped from an
earlier drop to add 0.5 percent.
"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 gained in trading thinned by a national holiday
Thursday for Thanksgiving. The Dow Jones industrial average
was up 43.81 points, or 0.34 percent, at 12,832.32. The
Standard & Poor's 500 Index was up 2.18 points, or 0.16
percent, at 1,389.99. The Nasdaq Composite Index was up
9.99 points, or 0.34 percent, at 2,926.67.
Investors in the U.S. digested the latest data, including
weekly jobless claims that met expectations and a final read on
November consumer sentiment that was below forecasts.
Market participants remained anxious about tax and spending
changes - known as the fiscal cliff - poised to come into effect
in the new year, though policymakers are not expected to return
to negotiations until after Thanksgiving.
The benchmark 10-year U.S. Treasury note was
down 6/32, with the yield at 1.6865 percent.
The euro rose less than 0.1 percent to $1.2822,
though it rebounded from an earlier drop of as much as 0.5
Prices for German debt, the safest in the euro zone, had
eased slightly, sending 10-year yields down modestly to 1.428
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 Tuesday after
Federal Reserve Chairman Ben Bernanke warned that the central
bank lacked the tools to cushion the impact of a potential U.S.
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 initially fell Wednesday on news of the Greek
aid-payment delay, but closed modestly higher, buoyed by gains
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 later rose 1 percent to the dollar,
rebounding from its weakest level since early April. The U.S.
dollar was flat against a basket of currencies, while
Brent crude erased earlier losses to trade flat at
$109.91 per barrel.
Oil rose 0.9 percent, with investors continuing to watch
tensions in the Middle East even as a ceasefire was declared to
end violence between Israel and Hamas, which many had feared
could disrupt oil flows. Concerns about Greece and the impact
that could have on international growth, however, weighed on
crude prices and kept commodity prices volatile.
"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.