NEW YORK (Reuters) - Stocks markets around the world clung to modest gains on Thursday, with European equities retreating from seven-year highs, after Germany rejected a Greek proposal to extend its bailout and as oil prices dropped.
Government borrowing costs fell across the euro zone and the euro lost ground against the yen and dollar.
Despite the German rejection, Greece’s wording of a document seen by Reuters appeared to cooperate substantially with the terms laid out by euro zone finance ministers in earlier negotiations.
“At this point, investors think that even if a deal is reached, it won’t mean that the ‘Greek issue’ will be resolved,” said Mirabaud Securities senior equity sales trader John Plassard in Geneva. “There will be serious doubts on whether Greece will fully implement the agreement.”
The Greek request for a six-month extension to its euro zone loan agreement came as it was only weeks away from running out of cash. Crucially, Greece agreed the plan would be monitored by the EU Commission, the European Central Bank and the International Monetary Fund, a retreat by Prime Minister Alexis Tsipras, who had vowed to end cooperation with ‘troika’ inspectors.
The Dow Jones industrial average .DJI ended down 43.31 points, or 0.24 percent, to 17,986.54, the S&P 500 .SPX closed down 2.2 points, or 0.1 percent, to 2,097.48 and the Nasdaq Composite .IXIC finished up 18.34 points, or 0.37 percent, to 4,924.70. [.N]
Nasdaq reached a 15-year high at 4,929.527 points.
FTSEurofirst 300 index .FTEU3 of top European shares closed up 0.3 percent at 1,520.22 after hitting a seven-year high of 1.522.25. [.EU]
Tokyo's Nikkei index .N225 reached 18,322.50, a 15-year high. [.T]
In the currency market, the euro EUR=EBS shed 0.3 percent against the dollar at $1.1360 after Wednesday's gains on the minutes of the Federal Reserve's January policy meeting. It was down 0.2 percent against the yen at 135.18 yen EURJPY=EBS.
The dollar .DXY rose 0.3 percent against a basket of major currencies after falling on Wednesday on the notion the minutes hinted a rate hike in June was unlikely. [FRX/]
“There’s a reconsideration in terms of the extent to which the minutes were suggesting that June was being taken off the table,” said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.
As Wall Street pared its losses in late trading, investors pulled some money out of safe-haven U.S. Treasuries, with the 10-year yield US10YT=RR rising to 2.11 percent. [US/]
Ten-year bond yields in Spain, Italy and Portugal, the countries most vulnerable to the Greek crisis, fell four to seven basis points to 1.55 percent ES10YT=TWEB, 1.60 percent IT10YT=TWEB and 2.25 percent PT10YT=TWEB respectively.
In oil markets, benchmark Brent crude futures LCOc1 for April ended down 32 cents, or 0.53 percent, at $60.21 a barrel. U.S. crude CLc1 settled down 98 cents, or 1.88 percent, at $51.16. Oil pared its earlier drop after government data showed a smaller increase in weekly build in U.S. crude inventories than a private report had shown late Wednesday.
Spot gold prices XAU= fell $6.01 or 0.50 percent, to $1,206.60 an ounce. [GOL/]
Additional reporting by Sam Forgione in New York, Marius Zaharia in London and Blaise Robinson in Paris; Editing by Meredith Mazzilli and James Dalgleish