U.S. stocks and the euro rose on Thursday but remained pressured by comments from top Republican lawmaker John Boehner

(Reuters) – U.S. stocks and the euro rose on Thursday but remained pressured by comments from top Republican lawmaker John Boehner, who indicated no substantive progress in the last two weeks in talks to reach a U.S. budget deal.

Boehner, the speaker of the U.S. House of Representatives, said he had no idea what compromises President Barack Obama was prepared to make on spending cuts.

Boehner’s comments rattled investors, who had earlier driven a leading world stock index to a three-week high alongside a rally in the euro and commodities. Major U.S. indexes went negative to little changed before investors began betting rhetoric will not prevent a deal.

Hopes remain high that U.S. political leaders will reach a deal to avert $600 billion in spending cuts and tax hikes that some economists believe could tip the world’s biggest economy back into recession.

“When the sentiment is that nothing is going to get done, it does create a lot of anxiety and selling pressure. If there’s any sense of progress, then the market seems to rally,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago. “I think we’re hostage to this for the rest of the year.”

The “fiscal cliff” is the biggest risk facing global markets in the final weeks of the year, following an agreement earlier this week on fresh aid for Greece.

The Dow Jones industrial average .DJI ended up 36.71 points, or 0.28 percent, at 13,021.82. The Standard & Poor’s 500 Index .SPX was up 6.02 points, or 0.43 percent, at 1,415.95. The Nasdaq Composite Index .IXIC was up 20.25 points, or 0.68 percent, at 3,012.03.

The MSCI global equities index .MIWD00000PUS was up 0.9 percent at 332.34, after earlier touching its highest level since November 7.

The FTSE Eurofirst 300 index .FTEU3 finished up 1.1 percent, with the close of European stock markets almost coinciding with Boehner’s comments. It was the highest close for the benchmark European index since July 2011. Mining stocks, which are seen as among the riskiest equity sectors because they are more sensitive to changes in economic sentiment, were the best performers.

Good demand at a bond sale by Italy, where yields fell to their lowest level in two years, added to signs the crisis in the euro area has begun to ease and helped bolster optimism early in the global day.

Traders said until a deal was reached in Washington, share markets were likely to remain skittish.

U.S. government debt prices rose on safe-haven demand from investors who were rattled about the progress of budget talks in Washington.

The benchmark 10-year U.S. Treasury note was up 4/32, the yield at 1.6182 percent.

“There is very little conviction with all the political headlines,” said Carl Lantz, chief U.S. interest rate strategist at Credit Suisse in New York.

Boehner, the speaker of the U.S. House of Representatives, said he had no idea what compromises President Barack Obama was prepared to make on spending cuts.

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About George Fisher

George is a freelance writer, an author and a Democratic political consultant. He has worked as Deputy Communications Director for a Senatorial campaign and Campaign Manager for several NC House races and one congressional race. He previously worked as a news producer for a local television station.
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