* World stocks rise, Greece debt concern eases
* US shares rise, pare gains into close ahead of job data
* Pound stabilises, but remains under pressure
(Updates with U.S. close)
By Al Yoon
NEW YORK, March 2 (Reuters) - Global equities edged higher
on Tuesday over growing expectations debt-stricken Greece will
secure financial aid, while Britain's pound floundered over
political worries and public debt.
U.S. and euro zone government bond prices softened slightly
as optimism that Greece would announce new austerity measures
and win European Union financial support undermined the bonds'
safe-haven allure.
World stocks as measured by MSCI <.MIWD00000PUS> rose 0.83
percent, with all global markets, including emerging markets,
trading higher. U.S. shares pared gains late, however.
The European Commission said Greece must take additional
measures to reach its deficit reduction target of 4 percent of
gross domestic product in 2010. It said the Greek government
was united and determined to do what was necessary to reach
that target. For details, see [].
"The market believes that Greece is going to be resolved,"
said Paul Mendelsohn, chief investment strategist at Windham
Financial Services in Charlotte, Vermont. "You are not going to
get the worst-case scenario. This is probably going to be
kicked down the road into the future."
Tuesday's advance earlier pushed the Dow Jones Industrial
Average <> into positive territory for 2010, a day after
two other major U.S. indexes topped the break-even mark for the
year. Concerns about the U.S. employment report for February,
due Friday, limited moves and were cited as reason for the
later day pullback.
Economists surveyed by Reuters expect, in a median
forecast, U.S. businesses shed 50,000 jobs last month, with the
unemployment rate rising to 9.8 percent from 9.7 percent.
Merger activity helped set a positive tone after CF
Industries Holdings Inc <CF.N> upped its hostile bid for Terra
Industries Inc <TRA.N> to $47.40 per share in cash and stock.
Terra shares rose 10.85 percent to $45.67 while CF shares
dropped 1 percent to $106.42. []
While equity markets are generally higher, they are
struggling to sustain the rebound from January. Many shares are
still in the red for this year and managers have toned down
expectations for gains after last year's powerful rallies.
Wealth manager Sarasin said in a note that the rally is
likely to continue but with corrections, prompting it to take
some money off the table.
"Since the risks of setbacks are gradually increasing, we
would use strong market phases to further reduce our equity
positions," it said.
European equity markets in particular remain skittish about
the state of euro zone finances, with Greece and other member
states struggling to come to grips with ballooning debt.
"Earnings in general have been on the right side of things.
But what is still going on in the background is the Greece
issue," said Bernard McAlinden, market strategist at NCB
Stockbrokers in Dublin.
In New York, the Dow industrials rose 2.19 points, or 0.02
percent, to 10,405.98. The Standard & Poor's 500 Index <.SPX>
climbed 2.6 points, or 0.23 percent, to 1,118.31 and the Nasdaq
Composite Index <> gained 7.22 points, or 0.32 percent, to
2,280.79.
The pan-European FTSEurofirst 300 <> rose 0.76
percent and Japan's Nikkei <> gained half a percent.
POUND SLIDES
Some focus within Europe shifted to Britain, where a
general election to be called in the first half of the year was
creating uncertainty about attempts to fix the country's public
finances.
Sterling came under pressure, falling half a percent to a
session low of $1.4853 before recovering to $1.4953 <GBP=>.
On Monday, it slumped to a 10-month low of $1.4780.
Although it later trimmed some losses, it still finished the
day down 1.7 percent for its biggest one-day percentage fall in
more than four months.
Investors worry that the election may give neither the
opposition Conservatives nor the ruling Labor Party a
parliamentary majority, leading to a political stalemate.
In other currencies, the euro <EUR=> rose 0.4 percent to
$1.3606, bouncing from a 9-1/2-month low hit earlier as
investors awaited Greece's austerity plans. Against the
Japanese yen, the dollar <JPY=> slipped 0.4 percent to 88.73
yen.
Speculation that the EU would resolve Greece's fiscal
situation and strength in stocks led traders to pare safe-haven
bets on government debt.
Greece's borrowing costs fell to their lowest level in
weeks as its government is expected to announce new austerity
measures to win European debt guarantees. The bid for U.S. debt
eased, leaving yields on benchmark 10-year U.S. Treasury notes
<US10YT=RR> unchanged at 3.61 percent.
In energy and commodities prices, U.S. light sweet crude
oil <CLc1> rose $1.00, or 1.27 percent, to $79.70 per barrel,
and spot gold prices <XAU=> fell 30 cents, or 0.03 percent, to
$1133.90.
(Additional reporting by Joanne Frearson and Jeremy Gaunt in
London, and Chuck Mikolajczak in New York; Editing by Andrew
Hay)
