* Global stocks rise but S&P dips on regulatory bank fears
* Euro hit by uncertainty over Greek financial aid package
* Bonds pare early gains on Greece aid before Fed meeting
* Oil slips below $85 a barrel as dollar strengthens
(Updates with close of U.S. markets)
By Herbert Lash
NEW YORK, April 26 (Reuters) - The euro fell and Greek debt
came under intense pressure on Monday on renewed jitters over
Greece's bailout, while U.S. stocks mainly edged lower on fears
that the financial reform making its way through Congress will
curb bank profits.
U.S. government debt prices were little changed with
investors unwilling to commit to a strong market position ahead
of the Federal Reserve's two-day policy meeting that begins on
Tuesday. []
The euro fell against the U.S. dollar for the seventh of
eight trading sessions and fell to a three-month low against
sterling as investors fretted about the potential conditions
attached to loans from the European Union and International
Monetary Fund to Greece. Germany said aid could come in days if
Greece agreed to painful new austerity measures.[]
[]
Greece said on Sunday that 45 billion euros ($60.5 billion)
in planned EU-IMF assistance would arrive in time to refinance
an 8.5 billion euro bond on May 19.
"Aid for Greece still doesn't seem like a completed deal,
so all the uncertainty about the timing and details of a Greek
plan limits demand for euro," said Michael Malpede, analyst at
Easy Forex in Chicago.
Greek borrowing costs hit a 12-year peak as fears mounted
that the aid would come too late to avert the euro zone's first
sovereign debt default.
"Until the cash is on the table investors will continue to
demand very high risk premiums on Greek bonds," said Nick
Stamenkovic, strategist at RIA Capital Markets in Edinburgh.
The euro fell 0.2 percent to $1.3362 after earlier hitting
a session low of $1.3291 <EUR=>.
The weaker euro pressured gold prices, but news of limited
gold sales by the International Monetary fund provided
underlying support. Traders said the news on the IMF's gold
sales, reported by the World Gold Council, confirmed a market
view that renewed interest among central banks in the wake of
currency volatility would help limit official-sector gold
sales.
Spot gold <XAU=> hit a peak of $1,159.73 an ounce before
sliding $4.55 to $1,152.30. U.S. gold futures for June delivery
<GCM0> settled up 30 cents at $1,154 an ounce in New York.
Global stocks rose, boosted by gains of 1 percent or more
in Europe and Asia, but most U.S. stock indexes edged lower as
fears over the impact of financial reform largely overshadowed
strong quarterly profits from companies including Caterpillar.
[]
Global stocks as measured by MSCI's all-country world index
<.MIWD00000PUS> was up 0.4 percent.
The Dow eked out a gain as Caterpillar Inc <CAT.N>, the
heavy machinery maker, raised its full-year profit forecast and
cited improving economic conditions. Its shares rose 4.2
percent.
The Dow Jones industrial average <> was up 0.75 points,
or 0.01 percent, at 11,205.03. The Standard & Poor's 500 Index
<.SPX> was down 5.23 points, or 0.43 percent, at 1,212.05. The
Nasdaq Composite Index <> was down 7.20 points, or 0.28
percent, at 2,522.95.
A proposal to overhaul financial regulation that could
restrict lucrative derivatives trading was expected to face a
crucial Senate test vote on Monday and weighed on financial
shares. [][].
The KBW bank index <.BKX> dropped 3.1 percent.
"Most of the big banks' profits come from trading and if
you restrict their trading profits, that's going to restrict
their overall profits," said Keith Springer, president of
Capital Financial Advisory Services in Sacramento.
Springer said that regional banks also will be hurt even
more "because they can't make up the cost of the fees the
financial reform is going to charge them."
Top European shares rose, with the FTSEurofirst 300
<> index closing up 1 percent at 1,103.00 points.
Optimism about economic growth and commodity demand helped
European miners, which also benefited from a rise in key base
metals prices.
Copper rose to a 10-day high on optimism over growth and
demand for the metal gained following strong U.S. housing
market data last week. []
Copper for July delivery <HGN0> rose 1.75 cents to settle
at $3.5480 a pound in New York.
U.S. Treasury debt prices began the day higher, spurred by
safe-haven bids on Greek debt concerns, but caution ahead of
the Fed's policy meeting on Tuesday and Wednesday muted gains.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
2/32 in price to yield 3.81 percent, but the 30-year U.S.
Treasury bond <US30YT=RR> was down 1/32 in price to yield 4.67
percent.
The yield spread against German Bunds scaled 12-year highs
as the cost of insuring against a default by Greece hit a
record high. Sovereign credit risk fears also boosted the cost
of insuring Portuguese debt to new highs.
The Greek/German 10-year bond yield spread <GR10YT=TWEB>
<DE10YT=TWEB> climbed to 680 basis points, passing the previous
record set last week of 611 basis points, and matching levels
last seen in February 1998.
U.S. crude prices fell below $85 a barrel as the dollar
rose on Greece and as the energy market girded for further
growth to U.S. inventories. []
U.S. crude for June delivery <CLc1> settled at $84.20 a
barrel, down 92 cents, while the front-month contract for
London ICE Brent crude <LCOc1> settled down 42 cents at $86.83.
[]
The dollar was up against a basket of major currencies,
with the U.S. Dollar Index <.DXY> up 0.06 percent at 81.401.
Against the yen, the dollar <JPY=> was up 0.12 percent at
94.02. The dollar rose against the yen on investor bets that
the Fed would raise interest rates before year-end, well ahead
of any move by the Bank of Japan. The Fed is expected to sound
an upbeat note about the economy when it meets Tuesday and
Wednesday.
Overnight in Asia, the MSCI index of Asia-Pacific shares
outside Japan <.MIAPJ0000PUS> rose 1.3 percent, and Japan's
Nikkei average climbed more than 2 percent.
(Reporting by Ryan Vlastelica, Steven C. Johnson and Richard
Leong in New York and Joe Brock, Kirsten Donovan and Pratima
Desai in London; Writing by Herbert Lash; Editing by Leslie
Adler)
