US bond yields rise on Greece optimism; stocks slip

By Caroline Valetkevitch

NEW YORK (Reuters) - World stock markets slipped on Friday, in part on weakness in technology shares, while signs of a possible agreement between Greece and its creditors sent U.S. bond yields to nine-month highs by curbing demand for safe-haven U.S. debt.

Shares of U.S. chipmakers fell after a weak forecast from Micron Technology Inc .

Euro zone partners offered to release billions in frozen aid in a last-minute push to win Greece's acceptance of a cash-for-reform deal.

That helped to limit losses in global equity markets.

Greece's creditors gave its leftist government 24 hours to respond to the proposal, a Greek government official said on Friday shortly before an emergency cabinet meeting called by Prime Minister Alexis Tsipras.

"For the most part, we are trading off any news that comes out of Greece. I am looking for an agreement that falls somewhere in between full compliance and default," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

The Dow Jones industrial average was up 39.87 points, or 0.22 percent, at 17,930.23, the S&P 500 down 2.93 points, or 0.14 percent, at 2,099.38 and the Nasdaq Composite lower 40.68 points, or 0.8 percent, to 5,071.51.

Five of the 10 major S&P 500 sectors were lower, with information technology <.SPLRCT> leading the decliners with a 1.1 percent fall. Micron shares tumbled 17 percent.

MSCI's all-country index , a gauge of stock performance in 46 countries, dipped 0.4 percent, and was down for a third day, while the pan-European FTSEurofirst 300 index closed up 0.1 percent to 1,574.08 points.

TREASURY YIELDS JUMP

U.S. Treasury yields rose, with long-dated yields reaching a near nine-month high, after an offer by euro zone partners to release billions in frozen aid to Greece reduced demand for safe-haven U.S. debt.

U.S. 30-year Treasury yields rose to 3.23 percent, the highest since Oct. 3.

U.S. 30-year Treasuries were last down 1-7/32 in price to yield 3.22 percent, from a yield of 3.16 percent late Thursday. Benchmark 10-year notes were last down 23/32 in price to yield 2.48 percent, from a yield of 2.39 percent late Thursday.

Greece's Tsipras expressed his government's frustrations with creditors' demands for austerity, highlighting the gulf needed to be narrowed in weekend talks.

The euro fell to a session low $1.11550, a drop of 0.43 percent, after Tsipras's comments.

In commodities trading, crude futures rose modestly on hopes for a deal to help Greece avoid a debt default and on uncertainty over whether a nuclear deal could be sealed with Iran next week that may end crippling sanctions on its oil exports.

Brent futures were up 10 cents at $63.30 a barrel, while U.S. crude 5 cents higher at $59.75. [O/R]

(Additional reporting by Sweta Singh in Bengaluru, Sam Forgione in New York, John Geddie and Jemima Kelly in London; Editing by Bernadette Baum and Steve Orlofsky)