June 23, 2011 / 9:38 PM / 8 years ago

GLOBAL MARKETS-US stocks, euro trim losses on Greek deal news

* Signs of slower global growth boost risk aversion

* But some losses trimmed on Greece accord with EU-IMF

* Oil agency’s action on reserves adds to economic concern

* Private sector activity, rising jobless claims spur rout (Adds close of U.S. markets)

By Herbert Lash

NEW YORK, June 23 (Reuters) - Investors fled assets perceived as risky on Thursday after disappointing economic data and a surprise announcement that strategic oil reserves would be tapped, fueling concerns of a global slowdown.

But in a late development Greece won the consent of the European Union and International Monetary Fund for a new five-year austerity plan, which buoyed sentiment and propelled Wall Street stocks and the euro to trim losses. For details, see [ID:nL6E7HN278].

The Nasdaq composite stock index closed higher, while the Dow and S&P 500 ended well off their lows of the day.

“This is obviously a positive for the market since it kicks the can down the road and lets us get that off the table for the moment,” said Mickey Cargile, managing partner of WNB Private Client Services in Midland, Texas.

Greece’s prime minister pledged to push radical economic reforms through parliament, needed for Athens to receive more financial aid.

Crude prices plunged 6 percent, global stocks tumbled and the euro shed more than 1 percent after the International Energy Agency said it would inject 60 million barrels of government-held oil reserves into global markets. [ID:nLDE75M1BR]

The surprise intervention to aid the struggling global economy shocked traders as it is only the third time the IEA has made such a move. Traders had expected the IEA to give Saudi Arabia more time to increase supply.

“It comes after the Saudis said they would increase output, so it suggests they think this might not be enough,” said Helen Henton, head of commodity research for Standard Chartered Bank. “I think it will knock prices lower. I expect prices to be lower a month from now.”

North Sea Brent crude futures for August LCOc1 plunged by more than $8 after the news before settling at a four-month low of $107.26 a barrel, down $6.95 for the day.

U.S. crude CLc1 fell $4.39 to settle at $91.02 as traders bet the decision would have a bigger impact on Brent.

European shares closed at a three-month low and the euro fell to historic lows against the Swiss franc after data weakness in the U.S. job market last week and slower private-sector activity this month in China and Europe. [ID:nN1E75M08L]

Government debt prices rallied and the U.S. dollar strengthened because the dour economic news added to the prospect of a global slowdown.

Benchmark 10-year Treasury notes US10YT=RR rose 18/32 in price to yield 2.91 percent after yielding as low as 2.90 percent.

Gold fell 2.0 percent, its biggest one-day drop in over a month, amid growing anxiety about Greece and the economic outlook. The 19-commodity Reuters-Jefferies CRB index .CRB slid 2.3 percent.

Investors sold gold to cover steep losses in other markets. Gold had weakened on Wednesday after the Federal Reserve cut its forecasts for U.S. economic growth and was silent about another period of monetary support to bolster the economy.

“The market feels like ‘08 all over again,” said Joe Larizza, director of government and agencies trading at Vining Sparks in Memphis.

The Dow Jones industrial average .DJI closed down 59.67 points, or 0.49 percent, at 12,050.00. The Standard & Poor's 500 Index .SPX fell 3.64 points, or 0.28 percent, at 1,283.50. The Nasdaq Composite Index .IXIC rose 17.56 points, or 0.66 percent, at 2,686.75.

World stocks as measured by MSCI’s all-country world stock index .MIWD00000PUS fell 1.3 percent, pushing the index into negative territory for the year.

News of the Greece deal helped the euro pare losses against the Swiss franc after hitting a record low and curb a steep decline against the safe-haven dollar.

In late afternoon New York trading, the euro EUR= fell 0.7 percent against the dollar to $1.4256, according to Reuters data, up from a global session low of $1.4125.

U.S. August gold futures GCQ1 settled down $32.90 at $1,520.50 an ounce. (Additional reporting by Emily Flitter, Rodrigo Campos, Ellen Freilich, Robert Gibbons and Frank Tang in New York; Christopher Johnson, Jonathan Cable, Kirsten Donovan, Brian Gorman and Sue Thomas in London; Writing by Herbert Lash; Editing by Kenneth Barry)

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