June 20, 2011 / 6:33 PM / 8 years ago

GLOBAL MARKETS-Oil slips, euro wavers as Greek crisis lingers

* Euro zone ministers delay 12 bln euro loan to Greece

* Investors grapple with how much risk Greece crisis poses

* U.S. stocks rise but European shares down on unease (Adds fresh market prices)

By Herbert Lash

NEW YORK, June 20 (Reuters) - Oil slid and the euro wavered on Monday as risk aversion rose after European finance ministers postponed doling out emergency loans to Greece until the debt-strapped country approves new austerity measures.

Euro zone ministers meeting in Luxembourg gave Greece two weeks to approve stricter austerity measures in return for another 12 billion euros ($17 billion) in aid, piling pressure on Athens to get its ragged finances in order. For more, see: [ID:nLDE75I0FM]

Many asset classes hovered near break-even as investors grappled with whether Greece’s fiscal crisis posed systemic risks, as well as the outlook for a flagging U.S economy.

The euro slid against the Swiss franc but recouped losses against the U.S. dollar and yen, while the dollar rose slightly against a basket of major currencies. The U.S. Dollar Index .DXY was up 0.04 percent and the euro EUR= was down 0.03 percent.

Wall Street moved higher, pulling global stock indexes up to break-even levels, and bond prices fell, erasing early gains as fears over contagion from Greece’s debt crisis waned.

“Even though the EU is talking tough it looks like things are going to come through in terms of providing additional funding, at least through the end of this year, and probably something will come together on the broader package as well,” said Peter Jankovskis, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois.

Benchmark 10-year U.S. Treasury notes US10YT=RR fell 3/32 in price to yield 2.95 percent. Yields earlier hit 2.89 percent.

“Treasury bulls may in fact have gotten a bit over excited in the early trade,” said Gennadiy Goldberg, fixed income analyst at 4Cast Ltd. in New York.

The 10-year note has strong technical resistance at 2.88 percent, the lowest yield since the beginning of December and a level tested last week.

A further drop in U.S. bond yields may depend on whether investors fear a higher risk of contagion from the troubled euro zone, or see much weaker economic data.

“The market is having difficulty rallying without bad news from Europe or bad news on the side of the U.S. economy,” said Charles Comiskey, head of Treasury trading at Bank of Nova Scotia in New York.

U.S. stocks also came close to a key technical level as the Standard & Poor’s 500 index dipped toward 1,259, its 200-day moving average, which encouraged buyers. The index last fell below that level in September 2010.

“From a technical point of view, the 200-day moving average is where the market gains support,” said Jason Ware, senior equity analyst at Albion Financial Group in Salt Lake City.

The Dow Jones industrial average .DJI was up 59.26 points, or 0.49 percent, at 12,063.62. The Standard & Poor's 500 Index .SPX was up 5.49 points, or 0.43 percent, at 1,276.99. The Nasdaq Composite Index .IXIC was up 13.09 points, or 0.50 percent, at 2,629.56.

European shares fell on growing unease about the euro zone debt crisis and a possible downgrade of Italy’s credit rating. [ID:nLDE75J1P7]

The pan-European FTSEurofirst 300 .FTEU3 index of top shares closed 0.5 percent lower at 1,081.19 points, its lowest closing level in three months.

“There seems to be a standoff between euro zone finance ministers and Greece and that is causing uncertainty about the next tranche of funds and encouraging risk aversion,” said Joshua Raymond, market strategist at City Index.

Banks were under pressure, with the STOXX Europe 600 banking index .SX7P down 0.9 percent.

World stocks measured by the MSCI All-Country World Index .MIWD00000PUS straddled break-even, down 0.04 percent.

Oil prices in London fell while U.S crude prices rose, reflecting swelling inventories.

Brent crude LCOc1 fell $1.32 to $111.89 a barrel.

U.S. light sweet crude oil CLc1 rose 31 cents to $93.32 a barrel.

Commodity markets remained fixed on the European debt crisis, led by whether Greece will win more aid.

“An expected short-term agreement will likely enable markets to breathe a little easier and allow commodity complexes to stage a respectable bounce on account of a stronger euro,” MF Global analysts said in a note.

“However, any ‘solution’ for Greece will be a temporary fix at best, as this issue is far too difficult to be wrapped up in a few weeks.”

Spot gold prices XAU= rose $1.24 to $1,540.20 an ounce. (Additional reporting by Chuck Mikolajczak, Karen Brettell, Gertrude Chavez-Dreyfuss and Gene Ramos in New York; Writing by Herbert Lash; Editing by Leslie Adler)

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