* World stocks under pressure, markets off recent highs
* Euro falls against dollar on Greece, Fed rumor
* US equities gain on earnings, inflation in check
(Rewrites first paragraph, updates with close of European
markets, Federal Reserve no comment on discount rate rumor)
By Jennifer Ablan
NEW YORK, March 18 (Reuters) - World stocks dropped on
Thursday and the euro weakened against the U.S. dollar on
renewed worries about Greece, which said it may be unable to
solve its fiscal problems if borrowing costs stay high.
Adding to the moves in currencies, traders linked the
euro's selling to rumors the U.S. Federal Reserve would hike
the discount rate. Asked about the speculation, the Fed said it
does not comment on rumors. For details, see []
The euro <EUR=> fell to session lows against the U.S.
dollar of $1.3587 before recovering to $1.3619 at midday in New
York, according to Reuters data. The MSCI's all-country world
stock index <.MIWD00000PUS> dipped 0.46 percent while its
emerging market-only counterpart <.MSCIEF> fell 0.47 percent.
Greece raised the stakes in its quest for EU help to tackle
its debt crisis, saying it cannot achieve promised deficit cuts
if its borrowing costs remain so high and may have to call in
the IMF. [].
"This just highlights the uncertainty surrounding the
Greece issue. There seems to be no consensus in the euro zone,
which is undermining confidence and that is what is weighing on
the euro today," said Antje Praefcke, currency strategist at
Commerzbank.
The pan-European FTSEurofirst 300 <> index of shares
dropped 0.11 percent to end at 1,068.93 points, while the
Nikkei 225 Index <> fell 0.95 percent.
US EQUITIES RISE ON DATA
U.S. stocks rose, with the Consumer Price Index, an
inflation gauge, unchanged in February. Both Nike Inc <NKE.N>
and GameStop <GME.N> rallied after reporting results.
"Earnings continue to be good, and along with a lack of
inflation pressure, there's nothing preventing the markets from
continuing on their uptrend," said Carl Birkelbach, chairman of
Birkelbach Investment Securities in Chicago.
The Dow Jones industrial average <> was up 27.59
points, or 0.26 percent, at 10,761.26, during mid-day trading.
But the benchmark Standard & Poor's 500 Index <.SPX> was down
2.35 points, or 0.20 percent, at 1,163.86, while the Nasdaq
Composite Index <> was up 0.21 point, or 0.01 percent, at
2,389.30.
U.S. Treasury debt prices fell on looming supply,
overshadowing tame inflation data. The benchmark 10-year U.S.
Treasury note <US10YT=RR> was down 8/32, with the yield at
3.6702 percent, while the 2-year U.S. Treasury note <US2YT=RR>
was down 3/32, with the yield at 0.9601 percent.
At the longer end of the Treasury curve, the 30-year U.S.
Treasury bond <US30YT=RR> was down 11/32, with the yield at
4.591 percent.
The dollar was up against a basket of major trading-partner
currencies, with the U.S. Dollar Index <.DXY> up 0.72 percent
at 80.214 from a previous session close of 79.638. Against the
Japanese yen, the dollar <JPY=> was down 0.03 percent at 90.24
from a previous session close of 90.270.
U.S. light sweet crude oil <CLc1> fell 80 cents, or 0.96
percent, to $82.13 per barrel, while spot gold prices <XAU=>
rose $1.20, or 0.11 percent, to $1125.20.
Meanwhile, the Reuters/Jefferies CRB Index <.CRB> was down
1.30 points, or 0.47 percent, at 275.00.
(Additional reporting by Ellis Mnyandu in New York and Brian
Gorman and Jeremy Gaunt in London; Editing by Kenneth Barry)
