* Euro hurt by reports Greece wants safety net renegotiated
* S&P 500 edges higher with bank shares, Fed minutes
* Treasuries prices rise after solid 3-year auction
(Updates with U.S. market close)
By Walter Brandimarte
NEW YORK, April 6 (Reuters) - The euro fell broadly on
Tuesday as worries about Greece's finances resurfaced, and two
major U.S. stocks rose as minutes from the U.S. Federal
Reserve's latest meeting eased concerns over rising interest
rates.
The jitters about Greece spurred safe-haven demand for U.S.
Treasuries and also drove gold to a one-month high as investors
sought safety.
Crude oil hit an 18-month high as prices inched toward $87
a barrel on continued optimism over the economic recovery.
Concerns that the Greek financial crisis is far from over
increased on 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 reports, 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
[].
"This shows the debt crisis has intensified there, and I
think there's frustration that there's not more of an agreement
about how to deal with Greece and concern that the solution is
dragging out," said Tim Ghriskey, chief investment officer at
Solaris Asset Management in Bedford Hills, New York.
Wall Street initially dropped on the Greek woes and also on
speculation that U.S. policy makers could raise interest rates
earlier than expected after a batch of positive economic data
in recent days.
Those fears faded in the afternoon after the release of
minutes from the Fed's last policy meeting signaled that the
U.S. central bank could maintain ultra-low interest rates for
even longer than investors have anticipated if the economic
outlook worsens or inflation drops. []
"I think the interpretation is rates are going to stay low
and that's giving the impetus to the market to move higher,"
said Kurt Brunner, portfolio manager at Swarthmore Group in
Philadelphia.
"Couple that with what appears to be continued healing ...
and it seems that at least right now, it's the best of all
worlds," he added.
The benchmark S&P 500 and the Nasdaq both closed higher,
though the Dow industrials finished slightly lower.
The Dow Jones industrial average <> dipped 3.56 points,
or 0.03 percent, to 10,969.99, but the Standard & Poor's 500
Index <.SPX> closed up 2.00 points, or 0.17 percent, at
1,189.44. The Nasdaq Composite Index <> rose 7.28 points,
or 0.30 percent, to 2,436.81.
Rising bank shares buoyed the S&P 500 as Wells Fargo
Securities raised its recommendation on large-cap U.S. banks by
a notch to "market weight," citing positive economic data.
European shares hit an 18-month closing high, on the first
trading day after Friday's release of strong U.S. economic
data, even as gains were capped by doubts on Greece's ability
to emerge from its fiscal crisis. European markets were closed
on Friday and Monday for the Easter holiday.
The FTSEurofirst 300 <> index of top European shares
closed up 0.67 percent at 1,101.43 points, its highest close
since September 2008. It has jumped 70 percent from a record
low in March last year.
The MSCI emerging market stock index <.MSCIEF> climbed 0.26
percent, supported by commodity-related shares.
U.S. crude oil futures ended higher for a sixth consecutive
session. The contract for delivery in May <CLKO> 0.25 percent
to $86.84 a barrel, the highest settlement since Oct. 8, 2008.
EURO SINKS
The worries about Greece caused a sell-off in the euro
<EUR=>. The single European currency was down 0.63 percent
against the U.S. dollar at $1.3398, 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 and spurred bids at a $40 billion three-year
note auction.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
was up 7/32 in price, with the yield at 3.9584 percent, easing
from 3.99 percent late on Monday.
(Additional reporting by Leah Schnurr; Editing by Leslie
Adler)
