European and U.s. stocks slip on fiscal concerns

NEW YORK (Reuters)-the euro and the u.s. stocks fell on Tuesday as concerns about the threat to the world economy posed by the u.s. "fiscal cliff" offset optimism of a deal to relieve Greece debt, although European and Asian stocks gained on first investor optimism.

The downdraft in u.s. stocks was unlike moves higher on other stock markets around the world, while safe haven German bonds declined after global lenders a new deal to reduce Greece's debt and releasing loans needed to reached the country stay afloat.

But investors if Democrats and Republicans prepared to resume budget negotiations in Washington, again evaluated risk.

Senate Majority Leader Harry Reid said Tuesday that he is disappointed that there is "little progress" under democratic and Republican legislators as they try to reach a deal to prevent the end of the year "fiscal cliff.

President Barack Obama will this week launch a multiple pressure support for his proposals to avoid sharp tax increases and cuts which will otherwise enter into force at the beginning of 2013 and could hurt economic growth.

Positive u.s. economic data is not managed to concerns. A gauge of the U.s. business planned expenditure increased the most in five months in October. But a fourth consecutive month of declines in shipments underscores the damage inflicted by fear of a tighter fiscal policy next year.

"Now that Greece is out of the picture for the time being, the u.s. fiscal slope is front and center," said Christopher Vecchio, currency analyst at DailyFX in New York.

The euro touched $ 1.3009 early in the global day, its highest level since October 31, but lost momentum when tentatively set back. The last of 0.3 percent at $ 1.2932.

Michael Hintze, founder and CEO of hedge fund CQS, told a Reuters Summit he expects the euro zone to continue muddling through her problems. But he added that "the chances are pretty high ping on the road by misstep."

After 12 hours of talks, international lenders decided on steps to cut Greek debt to 124 percent of gross domestic product by 2020 and promised further measures to lower it below 110 percent in 2022.

After months of jockeying, the deal was generally expected by the markets and paves the way for the euro zone neighbors Greece and the International Monetary Fund to pay out nearly 35 billion euro aid next month.

But with doubts about the ability of Greece to its growth and debt reduction targets to hit, few analysts expect the most recent agreement to the last chapter in the euro zone crisis three years.

Although stocks waxed and waned during the u.s. session, they lost ground as investors finally found small gains support.

The Dow Jones industrial average.DJI ended down 89.24 points, or 0.69 percent, at 12, 878.13. The default & arms of 500 Index decreased 7.35 is points, or 0.52 percent/SPX, on 1, 398.94. The Nasdaq Composite Index fell 8.99 points, or 0.30 percent, IXIC. to 2, 967.79.

"It's about your money, and it's going now," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. "At this point, you must make your movements and

Avoid the threat of more taxes.

"As long as there is no deal, I would expect to see more of these machinations – just in case," he said.

The MSCI index of global stocks for last of 0.2 percent. European shares on the FTSEurofirst 300 index.FTEU3 ended up 0.3% and the MSCI index of shares the broadest of the Asia-Pacific outside Japan gained 0.5 percent on a near three weeks high.

DEBT TALKS

Safe haven German Government fell after the Greek deal bonds, with benchmark Bunds delivers on 1.434 percent. Ten year Greek yields were last at 15.824 percent.

The benchmark 10-year U.s. Treasury note rose 8/32, with the yield of 1.6386 percent.

"(The Greek deal) is not a green light for a sustainable rally for risk assets across the Board. As we have seen before once the market begins to investigate some of the details, well doubts, "said Michael Leister, a senior rates strategist at Commerzbank in London.

Unease about the American and Greek Finances was compensated by the encouraging data on the u.s. economy.

U.s. consumer confidence rose to a four-and-a-half year high in November as consumers became more optimistic about the economic prospects of the private sector, according to a report published on Tuesday.

The Greek agreement encouraged buyer on a three-week high before it gave profits, while Brent crude retreated to about 110 dollars per barrel as Greek optimism was countered by concerns about the looming fiscal situation of the USA. U.s. crude oil futures fell 0.5 percent to $ 87.31.

After a first post-Greek deal lead decreased to $ 741.25 per ounce gold, of 0.4 percent.

(Reporting by Nick Olivari additional reporting by Angela Moon and Ed Krudy in New York and Marc Jones and Emelia Sithole-Matarise in London; Edit by Dan Grebler)

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