Euro falls amid Greek standoff, but shares rebound

Tue Jun 16, 2015 4:20pm EDT
 
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By Ryan Vlastelica

NEW YORK (Reuters) - The euro fell on Tuesday as it appeared more likely that debt-stricken Greece would default or have to leave the single currency, while the U.S. dollar rose at the start of a two-day meeting by the Federal Reserve.

Stocks mostly rose on the day, with shares in both Europe and the United States rebounding after a two-day decline, though investors continued to closely monitor the situation with Greece. Wall Street stocks were also supported by potential deal activity in the healthcare space.

Prime Minister Alexis Tsipras lashed out at Greece's creditors on Tuesday, accusing them of trying to "humiliate" Greeks, and he defied a drum beat of warnings that Europe is preparing for his country to leave the euro. The address was seen as a sign that Tsipras was unlikely to accept austerity cuts needed to unlock frozen aid and avoid a debt default within two weeks.

"The market is still anxious about Greece and would like the situation to be dealt with one way or another. The week-after-week uncertainty isn't good for the market," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The euro EUR= fell 0.35 percent to $1.1243 while the U.S. dollar index .DXY, which measures the greenback against a basket of currencies, rose 0.2 percent. The yen JPY= was flat against the dollar.

The all-country MSCI International ACWI Price Index .MIWD00000PUS rose 0.3 percent, while the pan-European FTSEurofirst 300 .FTEU3 ended 0.6 percent higher, rebounding after a decline of 2.4 percent over the previous two sessions. Shares in Hong Kong .HSI fell 1.1 percent.

The Dow Jones industrial average .DJI rose 113.31 points, or 0.64 percent, to 17,904.48, the S&P 500 .SPX gained 11.86 points, or 0.57 percent, to 2,096.29 and the Nasdaq Composite .IXIC added 25.58 points, or 0.51 percent, to 5,055.55. The S&P 500 is coming off a two-day decline of 1.2 percent.

Wall Street was also lifted after the Wall Street Journal reported that UnitedHealth (UNH.N: Quote) was considering buying Cigna (CI.N: Quote) and Aetna (AET.N: Quote). UnitedHealth, a Dow component, rose 2.2 percent to $121.55.   Continued...

 
Euro notes are spread out at a bank branch in Madrid January 13, 2011. REUTERS/Andrea Comas