NEW YORK (Reuters) - Stocks worldwide rose on Wednesday on signs a resolution of Greece's debt crisis appeared in hand, but U.S. stocks later dropped from earlier levels after the prime minister called on Greeks to reject a bailout deal with international creditors.
Prime Minister Alexis Tsipras urged citizens to vote "No" in a referendum on Sunday on the bailout, in a defiant address that dispelled speculation he was dialing back his combative stance.A "No" vote would not be tantamount to a rejection of Europe or the euro, Tsipras said. Instead, it would step up pressure on creditors to give Greece what it considered an economically viable agreement.Major European stock indexes earlier surged 2 percent or more, with Germany's DAX <.gdaxi> gaining more than 3 percent, after Tsipras told international creditors that Athens could accept the bailout offer if some conditions were changed. Later, he told Greeks that the country was being "blackmailed.""People thought he was ready to throw in the towel; obviously that's not going to be the case," said Robbert van Batenberg, director of market strategy at Societe Generale in New York."One line of thinking says with a 'No' vote in hand Tsipras can tell creditors that, 'Look, the people don't want this. The people want to protect their pensions. You got to give me a better deal.'"The pan-European FTSEurofirst 300 index <.fteu3> rose 1.6 percent to close at 1,533.89, while Germany's DAX gained 2.2 percent. MSCI's all-country equities world index <.miwd00000pus> rose 0.47 percent, after earlier gains of almost 1 percent. MSCI's emerging markets index <.mscief> retreated, falling 0.26 percent. Stocks on Wall Street fell from earlier highs. The Dow Jones industrial average <.dji> closed up 138.4 points, or 0.79 percent, to 17,757.91. The S&P 500 <.spx> gained 14.31 points, or 0.69 percent, to 2,077.42, and the Nasdaq Composite <.ixic> added 26.26 points, or 0.53 percent, to 5,013.12.Prices of battered bonds from southern European countries rose, while safe-haven debt such as U.S. Treasuries and German bunds fell. The euro was lower after Greece's overnight default on its International Monetary Fund loans weakened the single currency by about half a percent. The benchmark 10-year Treasury note