GLOBAL MARKETS-Euro, oil rally on Greek deal; stocks flat

By Walter Brandimarte

NEW YORK, Feb 9 (Reuters) - The euro hit a two-month high against the dollar on Thursday after Greek policymakers agreed to an austerity package, but U.S. stocks paused from their recent ascent as investors wondered whether the Greek deal will be enough to avoid a messy default.

News that Greek leaders had clinched a long-stalled deal just hours before a key meeting with the country's financial backers encouraged investors to take on some risk, driving prices of safe-haven U.S. Treasuries down.

Oil prices rallied more than 1 percent on the agreement, which is crucial to secure a 130 billion euro ($172 billion) bailout for Greece.

Still, details were scarce and investors wondered whether it will be enough to secure the funds, as well as what contribution the European Central Bank will offer in the restructuring of Greece's debt.

Adding to the uncertainty, Dutch Finance Minister Jan Kees de Jager said a final decision on a second bailout package for Greece will not be taken on Thursday.

On Wall Street, investors seemed tempted to take profits, keeping a lid on key stock indexes.

"There is definitely a whiff of 'sell the news' in the air," said Michael Marrale, managing director and head of sales trading at RBC Capital Markets in New York. "We've climbed this wall of worry and the first reaction for people is to hit the sell button."

The Dow Jones industrial average was down 14.68 points, or 0.11 percent, at 12,869.27. The Standard & Poor's 500 Index was down 2.26 points, or 0.17 percent, at 1,347.70. The Nasdaq Composite Index was up 4.46 points, or 0.15 percent, at 2,920.32.

In Europe, the FTSEurofirst 300 index index of top shares edged up 0.3 percent. World stocks measured by the MSCI All-Country World Index gained 0.16 percent.

The euro jumped to $1.33, up 0.36 percent on the day and its highest since early December. With much of the market still scurrying to cover bets against the currency, some traders said the currency could be headed for $1.35 in the short run.

Also supporting the euro were comments from ECB President Mario Draghi, who said the euro zone outlook, while uncertain, had stabilized.

"That poured a little cold water on expectations of a March rate cut," said Adnan Akant, head of foreign exchange at Fischer Francis Trees & Watts, with $48 billion in assets.

Benchmark 10-year U.S. Treasury notes fell 17/32 in price, which took its yield up to 2.04 percent. Lower-than-expected claims for unemployment benefits in the U.S. also contributed to reduce the appeal of Treasuries.

Prices of 30-year Treasuries fell nearly one point, taking the yield to a nearly three-month high of 3.19 percent before a $16 billion auction of 30-year bonds.

U.S. crude oil prices rose 1.3 percent to $100 a barrel, the third day of gains.