Shares fall in thinly traded markets; safe-havens up

NEW YORK (Reuters) - A wave of risk aversion swept through global markets on Tuesday, magnifying moves as light-volume end-of-year trades focused on worries about Greece's future in the euro zone, pushing shares lower and lifting the safe-haven yen, silver and gold.

Oil prices hit new 5-1/2 year lows , while copper rose for the first session in five after hitting its lowest in 4-1/2 years on Monday.

Wall Street, where the S&P 500 notched its latest record high on Monday, was lower. The benchmark index is on track to close its third-straight year of double-digit positive returns.

"I still like equities, but we?re at a point where valuations are no longer really cheap," said James Liu, global market strategist for JPMorgan Funds in Chicago. "I don?t see much that looks inexpensive, but with the volume so low, it's hard to know how much we should read into specific moves."

The Dow Jones industrial average was down 57.92 points, or 0.32 percent, at 17,980.31. The Standard & Poor's 500 Index was down 6.75 points, or 0.32 percent, at 2,083.82. The Nasdaq Composite Index was down 17.01 points, or 0.35 percent, at 4,789.91.

An MSCI gauge of stocks in major markets fell 0.5 percent, weighed down by a 1.6 percent drop in Tokyo's Nikkei for its final session of 2014. European shares fell 1 percent.

The thinly traded market, particularly in Europe, triggered a "magnified reaction to headlines from Greece" according to Scott Clemons, chief investment strategist at Brown Brothers Harriman Private Banking in New York.

But Greece's bond yields , a proxy of the government's borrowing costs, steadied as investors took a relatively sanguine view of snap elections that are likely to empower a party seeking to flout international bailout terms.

The left-wing Syriza party, which opposes the European Union/International Monetary Fund bailout, has said it wants to abandon many of the drastic spending cuts that are central to Greece's economic comeback.

The benchmark 10-year U.S. Treasury note was up 9/32, the yield at 2.1739 percent

The euro held just above a 2-1/2 year low at $1.2169 as more lackluster bank lending data and fresh evidence of deflation taking hold in Spain and Italy bolstered the case for further monetary easing from the European Central Bank.

The yen gained about 1 percent against both the dollar and euro as investors sought the traditional safety of the Japanese currency.

Oil prices, another focus for world markets of late, pared losses in volatile trading after earlier extending lows not seen since May 2009. Brent was down 0.8 percent at $57.40 after having hit $56.74 earlier. U.S. crude edged down 0.2 percent to $53.51 a barrel.

The American Petroleum Institute is scheduled to release its inventory report later in the day ahead of U.S. Department of Energy data on Wednesday.

Tamas Varga, an analyst at PVM Oil Associates, saw no let-up in the sell-off, saying the bears were in firm control of the market. "The trend is still down and supports are expected to be under pressure. It is not recommended to go against this trend."

Spot gold rose 2 percent while silver added 4 percent. Copper bounced from a 4-1/2 year low to gain 0.5 percent at $6,320.75 a ton.

(Additional reporting by Ryan Vlastelica and Sam Forgione; Editing by Dan Grebler)