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NEW YORK (Reuters) - Equities markets rose on Wednesday, lead by gains in European stocks, and the euro edged up on signs, later dismissed, that Greece and its creditors were drafting an agreement that would provide Athens much-needed debt relief.
U.S. equities also climbed on the news on Greece, with the Nasdaq posting a record closing high.
Wednesday's gains in equities came a day after European and U.S. equities slumped on worries about Greece.
The U.S. dollar index ticked lower, though the greenback advanced against the yen. Nikkei futures rallied.
Greece's government said it was starting to draft an agreement with creditors including the European Union and the International Monetary Fund, but European officials quickly dismissed that as wishful thinking.
The rebuttal notwithstanding, market moves triggered by the Greek announcement mostly held into the end of the session.
"It clearly shows that the markets have got a reaction on all these occasions as they'd like to see a deal, a continuation of the euro zone as a whole," said IG analyst Chris Beauchamp.
"But you shouldn't really believe anything until the deal is officially on the table and the ink is dry. Until you reach that point, everything is just up in the air as it has been."
The Dow Jones industrial average .DJI rose 121.55 points, or 0.67 percent, to 18,163.09, the S&P 500 .SPX gained 19.29 points, or 0.92 percent, to 2,123.49 and the Nasdaq Composite .IXIC added 73.84 points, or 1.47 percent, to end at a record 5,106.59.
“People felt yesterday was an overreaction and I would agree,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Illinois
The FTSEurofirst 300 index .FTEU3 of top European shares closed 1.3 percent higher after falling 1.1 percent in the previous three sessions. Greek shares < .ATG> closed up 3.6 percent.
Nikkei futures NKc1 rose 1.1 percent on the back of the softer yen.
The greenback's eight-year high against the yen, at 124.06, helped keep declines in the dollar index in check. A move above 124.16 would take the yen to its weakest since late 2002.
"All those comments have to be taken with a big pinch of salt, but it's helping there are signs we are moving toward a deal," said Charles St. Arnaud, currency strategist at Nomura Securities International in New York in regard to news on Greece.
U.S. crude CLc1 fell 0.8 percent at $57.55 per barrel after crude inventories unexpectedly rose in the latest week. Brent LCOc1 fell 2.3 percent to $62.28 a barrel.
U.S. 30-year Treasury prices were last up 15/32 in price to yield 2.868 percent and benchmark 10-year U.S. Treasury notes were last up 2/32 to yield 2.130 percent, from a yield of 2.135 percent late Tuesday.
Spot gold ticked up less than 0.1 percent in a choppy session and silver fell 0.4 percent.
Additional reporting by Liisa Tuhkanen and Atul Prakash in London and Richard Leong, Barani Krishnan and Sam Forgione in New York; Editing by Meredith Mazzilli and Leslie Adler