NEW YORK (Reuters) - Wall Street stocks rose modestly on Wednesday on hopes for an imminent Greek debt agreement and after data pointed to renewed life in the U.S. economy, while German debt yields climbed after comments from European Central Bank President Mario Draghi.
Greece's international creditors signaled on Wednesday they were ready to compromise to avert a default even as Athens warned it might skip an IMF loan repayment due this week.
German 10-year bond yields moved as high as 0.887 percent, a day after their biggest jump in nearly three years, after the ECB raised its inflation forecast for 2015. Draghi said the central bank saw no reason to adjust its monetary policy stance after a recent rise in bond yields in Europe.
In tandem with higher European yields, ten year U.S. Treasury yields US10YT=RR hit their highest since November at 2.3696 percent.
U.S. stocks ended slightly higher, partly lifted by data showing private employers picked up hiring in May, while the rise in bond yields helped lift financial shares. The report comes ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday.
"The biggest positive about the bond market weakness is that yields going higher is a net positive for all of the financials. Higher yields on fixed income translate into higher rates and that increases the net interest margin for financials," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
The U.S. dollar's recent woes continued, spurred by better-than-expected inflation figures in the euro zone that also battered sovereign debt. It marks the second such jump in both the euro and euro zone sovereign yields in the last six weeks.
The greenback .DXY fell 0.53 percent against a basket of major currencies.
The euro EUR= extended gains against the dollar Wednesday, ending up 1.07 percent to $1.1271 after hitting a high of $1.1284. The euro has gained more than 3.0 percent against the greenback in the last two days, its biggest two-day percentage gain since March 2009.
The selloff in Europe and U.S. government debt and the sharp move in the euro mirrors the activity from mid-April to mid-May. Investors earlier bet heavily on dollar and bond rallies to continue, and have since shifted positions to avoid big losses.
The Dow Jones industrial average .DJI rose 64.33 points, or 0.36 percent, to 18,076.27, the S&P 500 .SPX gained 4.47 points, or 0.21 percent, to 2,114.07 and the Nasdaq Composite .IXIC added 22.71 points, or 0.45 percent, to 5,099.23.
MSCI's all-country world index .MIWD00000PUS of stock performance in 46 countries was up 0.32 percent. The pan-European FTSEurofirst 300 stock index .FTEU3 closed down 0.12 percent.
Brent crude LCOc1 settled down $1.69 cents at $63.80 a barrel, and U.S. crude CLc1 settled off $1.62 at $59.64 a barrel as traders and investors ignored a fifth straight weekly decline in U.S. crude stockpiles to focus instead on a big build in distillates.
Additional reporting by Caroline Valetkevitch; Editing by Nick Zieminski and Bernadette Baum