U.S. stocks climb on data, Greek hopes; bund yields up

NEW YORK (Reuters) - Wall Street moved higher on optimism an agreement was on the horizon surrounding Greek debt and data pointed to a rebound in the U.S. economy, while German debt yields climbed after comments from European Central Bank President Mario Draghi.

Greece threatened to miss a loan repayment to the IMF this week, opening the way for possible default, just hours before creditors were expected to present an ultimatum offering Athens funds in return for economic reform.

But French President Francois Hollande said Greece and its creditors are on the brink of a long-awaited cash-for-reform deal, adding that any accord should be balanced.

German debt yields moved as high as 0.887 percent, a day after their biggest jump in nearly three years, after the ECB raised its inflation forecast for 2015. Draghi said the central bank sees no reason to adjust its monetary policy stance in response to a recent rise in bond yields in Europe.

"The net enthusiasm in the market is reflective of hopes that the Greek crisis is going to be resolved here shortly," said Matt Kaufler, portfolio manager at Federated Investors in Rochester, New York.

"Draghi?s policy is starting to show some lift in the euro zone?s aggregate inflation rate, albeit a marginal one, but nonetheless a lift."

Equities in the U.S. were buoyed by the Greek hopes, along with economic data that showed the trade deficit narrowed in April while private employers picked up hiring in May. The data came ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

The Dow Jones industrial average <.DJI> rose 146.91 points, or 0.82 percent, to 18,158.85, the S&P 500 <.SPX> gained 11.31 points, or 0.54 percent, to 2,120.91 and the Nasdaq Composite <.IXIC> added 36.83 points, or 0.73 percent, to 5,113.35.

MSCI's all-country world index <.MIWD00000PUS> of stock performance in 46 countries was up 0.58 percent.

The euro extended gains against the dollar on Wednesday, up 1 percent to $1.1266 after hitting a high of $1.1273. The euro is up more than 3 percent versus the dollar in the past two days, on track for its biggest two-day percentage gain since March 2009.

The greenback <.DXY> fell 0.5 percent against a basket of major currencies.

The pan-European FTSEurofirst 300 stock index <.FTEU3> edged up 0.13 percent while Germany's DAX <.GDAXI> gained 1.17 percent. Athens' main stock index <.ATG> jumped 4.13 percent.

With German bund yields still rising in Europe, U.S. Treasury yields rose to a three-week high. U.S. 10-year notes were last down 20/32 in price to yield 2.3337 percent.

In commodities, Brent crude was last off $1.29 at $64.20 while WTI crude was down 91 cents at $60.36 in volatile trade. U.S. crude stocks fell more than expected last week even as refinery run-rates eased, data from the Energy Information Administration showed on Wednesday.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

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