* Euro hurt by reports Greece wants safety net renegotiated
* US stocks little changed on Greece, interest rate outlook
* Treasuries prices rise as higher yields draw investors
By Walter Brandimarte
NEW YORK, April 6 (Reuters) - The euro fell broadly on
Tuesday and U.S. stocks were little changed, pressured by
rekindled fears about Greece's finances and prospects of higher
interest rates in the United States.
European shares hit an 18-month closing high, reacting to
recent U.S. strong economic data in the first trading day since
Thursday after the long Easter holiday weekend.
Commodity-related shares rose on higher prices of raw
materials.
Jitters about Greece resurfaced following reports that
Athens wants to amend a deal struck at a European Union summit
last month to bypass a contribution from the International
Monetary Fund, which could impose tougher conditions in
exchange for aid.
A Greek Finance Ministry source denied the report, but
yields on the country's 10-year bonds <GR10YT=TWEB> rose above
7 percent for the first time since the end of January,
according to Tradeweb. For details, see [] and
[].
"The bond spreads in Greece relative to German bonds are at
their widest level now since the introduction of the euro,"
said Tim Ghriskey, chief investment officer at Solaris Asset
Management in Bedford Hills, New York.
"This shows the debt crisis has intensified there, and I
think there is frustration that there is not more of an
agreement about how to deal with Greece and concern that the
solution is dragging out."
On Wall Street, bank shares rose on positive comments from
brokers, helping to offset worries about the impact of rising
Treasury yields. Mortgage rates are pegged to yields of the
benchmark 10-year Treasury note.
"Holding stocks back is a big surge in the 10-year yield,
and people may be expressing some concern on how the impact may
be on the housing market," said Peter Jankovskis, co-chief
investment officer at OakBrook Investments LLC in Lisle,
Illinois.
"We have seen some good signs of progress in terms of
economic recovery and growth, but now we're starting to see
some potential roadblocks coming into play."
The Dow Jones industrial average <> lost 16.48 points,
or 0.15 percent, at 10,957.07, while the Standard & Poor's 500
Index <.SPX> was down 0.37 points, or 0.03 percent, at
1,187.07. The Nasdaq Composite Index <> edged up 0.61
points, or 0.03 percent, at 2,430.14.
Shares of homebuilders slid on fears of higher mortgage
rates, with the Dow Jones home construction index <.DJUSHB>
falling 1.69 percent.
In Europe, the FTSEurofirst 300 <> index of top
European shares closed up 0.67 percent at 1,101.43 points as
investors reacted positively to Friday's strong U.S. jobs data.
Gains were capped by doubts on Greece's ability to emerge from
its fiscal crisis.
Commodity and banking shares were the leading gainers, as
U.S. crude oil rose 3 cents, or 0.03 percent, to $86.65 per
barrel, and spot gold prices <XAU=> rose $7.20, or 0.64
percent, to $1,136.90. A rise in copper prices to a 20-month
high also drove up the shares of miners.
EURO SINKS
The worries about Greece caused a sell-off in the euro
<EUR=>. The single European currency was down 0.88 percent
against the dollar at $1.3364, after hitting a session low of
$1.3357, the lowest in more than a week.
It also dropped 1.3 percent against the yen to 125.55 yen
<EURJPY=>.
"There's speculation that the financial situation in Greece
will become increasingly difficult," said Lutz Karpowitz,
currency strategist at Commerzbank in Frankfurt. "Negative news
about Greece will continue to pressure the euro."
Five-year Greek credit default swaps -- the cost of
insuring Greek debt against default -- rose to 377.3 basis
points from 347 basis points in New York on April 2, according
to CDS monitor CMA DataVision.
Benefiting from rising oil prices, the Canadian dollar
<CAD=D4> broke parity with the U.S. dollar for the first time
since July 2008, rising to C$0.9999 per U.S. dollar.
U.S. Treasury prices rose as a recent sharp rise in yields
attracted buyers. The benchmark 10-year U.S. Treasury note
<US10YT=RR> was up 7/32 in price, with the yield at 3.9584
percent, easing from 3.99 percent late on Monday.
With benchmark 10-year yields close to 4 percent, traders
expected solid demand for the Treasury's three-year note
auction later in the session.
(Additional reporting by Edward Krudy in New York; Editing by
Leslie Adler)
