Greek drama weighs on sentiment; yen off, euro up

By Reuters

May 28, 2015 06:36 PM EDT

The euro rose on Thursday as Greece fought to reach an agreement with its lenders to avoid an imminent default, but mixed signals on the state of the negotiations kept other markets little changed.

Crude oil futures rose in choppy trade after two days of sharp losses after data showed a fourth weekly drawdown in U.S. crude stockpiles.

Creditors said progress in talks with Greece was too slow and a deal was still out of reach, a euro zone official told Reuters. But Greece's government said it intends to reach an agreement with its lenders by Sunday.

"Everybody is coming out with a different story. I'm looking for an EU-endorsed comment rather than something coming from Greece to be sort of the final arbiter on what the sentiment really is with regard to a resolution," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, which manages about $67 billion in assets.

Stocks closed slightly lower on Wall Street, cutting previous losses. S&P 500 e-mini futures turned positive shortly after the cash market close.

At the closing bell in New York, the Dow Jones industrial average .DJI was down 36.87 points, or 0.2 percent, to 18,126.12, the S&P 500 .SPX had lost 2.69 points, or 0.13 percent, to 2,120.79 and the Nasdaq Composite .IXIC had dropped 8.62 points, or 0.17 percent, to 5,097.98.

Nikkei futures NKc1 fell 0.3 percent after 10 straight sessions of gains on the Tokyo index.N225. Earlier, the pan-European FTSEurofirst 300 index .FTEU3 fell 0.5 percent.

EURO UP, DOLLAR TREND SEEN HOLDING

The Japanese currency touched its weakest since 2002 against the U.S. dollar, at 124.46 yen. It ended the session down 0.2 percent at 123.94. The euro gained 0.4 percent to $1.0946 and the dollar index .DXY fell 0.5 percent after rising 1.4 percent in the previous two sessions.

"I see the dollar trade probably continuing at this point since we're the only ones moving toward a tightening bias," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"Greece is the wild card in terms of what will happen to the euro."

In government debt markets, U.S. 30-year Treasury bonds prices were last down 7/32 in price to yield 2.8857 percent, from 2.875 percent late on Wednesday.

U.S. three-year notes were last up 3/32 in price to yield 0.9571 percent, from 0.989 percent late Wednesday. Benchmark 10-year notes were flat, their yield at 2.135 percent.

Front-month Brent LCOc1 rose 1.4 percent to $62.91 a barrel and U.S. crude futures CLc1 rose 0.8 percent to $57.97.

Gold was little changed near $1,188 an ounce, spot silver dipped less than 0.1 percent on the day and copper CMCU3 rose 0.2 percent.

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