Sturdy earnings reports, Greece hopes lift markets

NEW YORK (Reuters) - The Greek parliament's approval of a third bailout program for the debt-stricken country boosted world stock markets, with Wall Street also buoyed by robust corporate earnings, while the U.S. dollar rose on expectations of higher interest rates.

Strong quarterly reports from U.S. blue chip companies helped U.S. shares, while European markets cheered news that the European Central Bank was pressing ahead with its economic stimulus program, had agreed to more funding for Greek banks, and promised further action if needed.

European shares hit a more than six-week high after the parliament in Athens approved austerity measures demanded by its lenders to open talks on the new bailout. The Greek parliament's vote left the government without a majority.

While the political climate in Greece remained fragile, with the International Monetary Fund saying this week that the country's debt was unsustainable, investors were willing to give a cautious thumbs-up to the Greek parliament's approval of the bailout plan.

"The deal has accomplished the objectives of the ECB and the IMF, which is to take Greece off the crisis burner and put it into the slow cooker," said John Rutledge, chief investment strategist at Safanad in New York. "The remaining issue is whether Greece will live up to what they agree to do."

MSCI's all-country world equity index <.MIWD00000PUS>, which tracks shares in 45 nations, was last up 0.64 percent at 431.74.

On Wall Street, the Nasdaq climbed to a three-week high and the S&P 500 was within 1 percent of its record peak as bellwether companies such as Citigroup , eBay and Netflix reported strong results.

The Dow Jones industrial average <.DJI> was last up 0.24 percent at 18094.16. The S&P 500 <.SPX> was up 0.65 percent at 2121.10, and the Nasdaq Composite <.IXIC> was last up 1 percent at 5149.118.

The FTSEurofirst 300 index <.FTEU3> of top regional shares closed up 1.4 percent at 1,608.71, near a more than six-week high of 1,613.61 hit earlier.

The dollar index <.DXY>, which measures the greenback against a basket of six major currencies, rallied to a more than seven-week high of 97.756 after Fed Chair Janet Yellen said on Wednesday a rate hike is likely this year.

Yellen is due to testify to the Senate Banking Committee on Thursday.

The euro hit $1.08550 , a more than seven-week low against the dollar. Short-dated Treasuries prices slipped on the favorable interest rate outlook, with three-year notes last down 4/32 in price to yield 1.05 percent, from a yield of 1 percent late Wednesday. Yields move inversely to prices.

"People are realizing what (Yellen) said, that every meeting is on the table going forward, and thinking maybe we shouldn?t be long the front-end," said Charles Comiskey, head of Treasuries trading at Bank of Nova Scotia in New York.

Brent crude oil prices rose after a power outage closed the UK's largest oilfield. Data also showed a fall in crude inventories and strong demand from refineries in the United States.

Brent crude for August was last up 74 cents at $57.79 a barrel. U.S. light crude was last down 22 cents at $51.19.

Spot gold prices hit an eight-month low of $1,142.10 on expectations for a Fed rate hike this year.

(Additional reporting by Jamie McGeever in London and Karen Brettell in New York and Tanya Agrawal in Bengaluru; Editing by Nick Zieminski and Bernadette Baum)

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