* Fed chairman lays out path for policy changes
* U.S. stocks flat as Bernanke views tempered
* Euro zone members set plan to help Greece
(Recasts, updates with midday prices)
By Manuela Badawy
NEW YORK, Feb 10 (Reuters) - U.S. stocks were flat on
Wednesday after investors tempered their views on remarks by
Federal Reserve Chairman Ben Bernanke on how the Fed aims to
unwind the emergency support it put in place to bolster the
economy and on news of a plan to help debt-stricken Greece.
European stocks closed higher on hopes of a European Union
rescue plan for Greece. Following the European market close,
the chairman of the Eurogroup said he would present a plan on
Thursday on Greece agreed by euro zone finance ministers.
And French newspaper Le Monde reported that France and
Germany are set to present a plan at the European Union summit
on Thursday to aid Greece.
Oil fell below $73 a barrel as the dollar strengthened
against the euro and after OPEC trimmed its 2010 global demand
growth forecast.
Markets initially reacted negatively to Bernanke's
comments, with investors jittery that a withdrawal of some of
the more than $1 trillion the Federal central bank has put into
the economy, which has underpinned the markets' rally since
last March, might come to an end sooner rather than later. But
investors later took a more moderate view.
"A lot of concern about the Ben Bernanke headlines earlier
about raising the discount rates are starting to subside as
people are viewing that less and less as a policy change as far
as tightening is concerned," said Dave Lutz, managing director
at Stifel Nicolaus in Baltimore.
"Also there's (headlines on) France and Germany presenting
proposals to help Greece at the EU Summit, so I think there's
some short-covering in front of that," he said, noting that the
dollar also rose on the news on Greece.
Federal Reserve Chairman Ben Bernanke said in written
remarks on Wednesday the U.S. central bank expects to increase
the spread between the discount rate and the target fed funds
rate before long further boosted the dollar and pushed the euro
below the key $1.3700 level. For Bernanke's remarks, see
[].
The U.S. central bank slashed benchmark rates to near zero
to combat the worst financial crisis since the Great
Depression. Bernanke made clear the time for tightening
monetary policy was still some ways away, even though the Fed's
thinking on its exit strategy had advanced.
The Dow Jones industrial average <> was down 4.39
points, or 0.04 percent, at 10,054.25. The Standard & Poor's
500 Index <.SPX> was down 0.88 points, or 0.08 percent, at
1,069.64. The Nasdaq Composite Index <> was down 1.99
points, or 0.09 percent, at 2,148.88.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was
down 5/32, with the yield at 3.6585 percent.
A $25 billion offering of 10-year notes at 1 p.m. EST (1800
GMT), was also weighing on the treasury market.
Two-year notes <US2YT=RR>, which are particularly sensitive
to changing views on Fed monetary policy, were last down 2/32
in price. The yield rose as far as 0.86 percent, the highest
since Feb. 4.
GREEK BAILOUT
European shares closed higher on hopes of a possible
European Union rescue plan for Greece, with banks stronger, but
gains were pared after U.S. Federal Reserve Chairman Ben
Bernanke outlined fiscal tightening plans.
The FTSEurofirst 300 index <> of top European shares
rose for a third day, closing 0.6 percent up at 987.13 points,
down from the day's high of 996.12.
The index is up 52.9 percent from its lifetime low of March
9, 2009, but is down 8.1 percent from a 15-month high it
reached on Jan 11.
The dollar was up against a basket of major trading-partner
currencies, with the U.S. dollar index <.DXY> up 0.21 percent
at 80.029. The euro <EUR=> was down 0.36 percent at $1.3739.
Against the Japanese yen, the dollar <JPY=> was up 0.26 percent
at 89.89 despite a wider-than-expected report on U.S. trade
deficit in December. [].
U.S. crude futures were trading at $72.91 a barrel, 84
cents down, after earlier hitting $74.30.
ICE Brent crude futures fell $1.11 to $71.01.
Gold prices <XAU=> eased 0.27 percent to $1074.2 on the
back of stronger U.S. dollar.
The Reuters/Jefferies CRB Index <.CRB>, a benchmark basket
of 19 futures, was up 0.17 percent, at 265.57.
World equities as measured by the MSCI All-Country World
Index <.MIWD00000PUS> was up 0.2 percent.
(Additional reporting by Gertrude Chavez-Dreyfuss, Editing by
Leslie Adler)
