(Updates with comment, market activity)

  * Gold rallies as Greek deal increases economic uncertainty

  * Oil rally spurs inflation worries, China, Fed easing supportive

  * Silver up despite drop in Chinese imports

  * Coming up: U.S. existing home sales Tuesday

  By Frank Tang and Amanda Cooper

  NEW YORK/LONDON, Feb 21 (Reuters) - Gold rose more than 1 percent on Tuesday, breaking ranks with the euro and equities, as a massive European bailout deal had investors buying the metal amid doubts the bailout will work.

  Gold rallied to its highest in more than two weeks after euro zone finance ministers agreed a 130-billion-euro ($172 billion) rescue for Greece. Analysts said the deal bought time for the single-currency bloc but left deep doubts about Greece's ability to recover and avoid default.

  Bullion has benefited from news that China recently cut its required reserve ratio and committed to help the euro bloc. The metal already received a strong boost after the U.S. Federal Reserve last month said it would keep rates near zero at least until late 2014.

  " Gold gets a boost from the EU kicking the can down the road," said Rob Kurzatkowski, senior commodity analyst at optionsXpress.

  " Not only does the bailout perhaps delay the inevitable (Greek bankruptcy), but it also opens the door for higher inflation across the euro zone," he said.

  Spot gold rose 1.3 percent on the day to $1,755.81 an ounce by 3:01 p.m. EST (2001 GMT), having earlier hit a high of $1,757.40, the loftiest price since Feb. 3.

  Bullion posted its biggest one-day gain in two weeks.

  A near $3 rally in U.S. crude futures to nine-month highs amid possible supply disruptions due to rising tensions between Iran and the West also boosted gold's inflation hedge appeal.

  U.S. COMEX April futures settled at $1,758.50 an ounce, up $32.60 from Friday's close as traders returned after Monday's U.S. Presidents Day holiday.

  Analysts said gold outperforming the U.S. stock markets and other riskier assets highlighted underlying inflation worries and lingering doubts on Greece's ability to avert a chaotic default in the long run. Both the S& P 500 and euro traded in the negative territory.

  However, gold could face strong headwinds as liquidity appears to tighten for European banks soon.

  The European Central Bank wants its second offer of cheap ultra-long funds next week to be its last, putting the onus back on governments to secure the euro zone's longer-term future.

  GOLD-EURO CORRELATION

  The positive 30-day log correlation between gold and the euro has risen to near 0.5 up from 0.3 last week, indicating a stronger positive link between the two.

  " Gold is trading more like the other metals - as a risk asset, rather than a risk hedge," Citigroup analyst David Wilson said.

  Even though gold has at times failed to rally in response to euro zone debt fears, investors have snapped up almost as much of the metal through exchange-traded products so far this month as they did in the whole of January.

  Holdings of gold in the world's major ETPs are set for a rise of more than 600,000 ounces so far in February, marking a second straight month of net inflows.

  Silver was up 2.2 percent at $34.29 an ounce, shrugging off a decline in imports by China.

  Chinese imports of silver fell to 191.7 tonnes in January, the lowest in three years. In 2011, China imported a total of 3,575 tonnes of silver, the lowest in four years.

  Platinum rose by 2.6 percent on the day to $1,682.74 an ounce, having earlier hit $1,687.50, a five-month high. Platinum prices have been boosted by supply worries in South Africa.

  Palladium rose 2.0 percent to $705.35 an ounce.

  3:01 PM EST LAST/ NET PCT LOW HIGH CURRENT

  SETTLE CHNG CHNG VOL US Gold APR 1758.50 32.60 1.9 1727.00 1759.50 184,493 US Silver MAR 34.429 1.213 3.7 33.325 34.465 56,697 US Plat APR 1684.90 51.00 3.1 1639.90 1693.60 11,608 US Pall MAR 710.75 22.65 3.3 687.50 714.75 6,772 Gold 1755.81 22.29 1.3 1731.90 1757.40 Silver 34.290 0.730 2.2 33.510 34.440 Platinum 1682.74 42.92 2.6 1646.00 1687.50 Palladium 705.35 13.57 2.0 696.63 711.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY

  CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 197,868 197,570 195,199 20.38 0.80 US Silver 77,842 48,723 43,653 30.42 -1.63 US Platinum 11,720 7,644 7,655 21.27 0.03 US Palladium 8,933 4,187 4,151 (Editing by Bob Burgdorfer and Marguerita Choy)

(Adds quotes, technical level, updates prices)

  * Greece bailout deal in place, but doubts remain

  * Treasury to sell $99 bln of notes this week

  * Fed sells $8.61 bln of shorter-dated Treasuries

  By Emily Flitter

  NEW YORK, Feb 21 (Reuters) - U.S. Treasury prices fell on Tuesday after a long-awaited bailout deal for Greece dented appetite for safe-haven assets, but losses were moderated by concerns over Athens' implementation of stringent austerity measures.

  The 30-year Treasury yield reached a technically significant level in upward trend, putting strategists on watch for a definitive break to higher yields in the long end of the Treasury curve in the coming days.

  " Treasuries have been caught in the crossfire between new money trying to put on longs and people selling on the Greece news," said Gennadiy Goldberg, interest-rate strategist at 4Cast, Inc. In New York.

  Goldberg said a yield of 3.19 percent on the 30-year bond represented a 23.6 percent retracement of the weekly measurement of the 30-year bond's rally from March 2011 to Oct. 2011.

  " If we establish a base on that level the next strong level on the weeklies would be around 3.38 percent or 3.50 percent, so it's a significant play at this point," he said.

  Prices were also undermined as the Treasury Department began selling $99 billion of U.S. Treasuries this week, beginning with $35 billion of two-year notes on Tuesday afternoon. Investors often push to cheapen Treasuries going into such sales.

  The Treasury's two-year note auction on Tuesday drew a high yield of 0.31 percent, the highest yield since July 2011. The sell-off in Treasuries deepened slightly afterward.

  Two-year Treasury note yields also hit 0.31 percent in the open market, marking the highest since late October.

  " Various factors have contributed to the backup, a notable one being very long dealer positions in the front end," said John Briggs, interest-rate strategist at RBS Securities in Stamford, Connecticut, in a note to clients after the auction.

  The Treasury will auction $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.

  Bonds dipped after euro zone ministers reached agreement on measures to cut Greece's debt to just above 120 percent of economic output by 2020, signing off on the country's second rescue in less than two years and allowing it to meet a bond repayment next month.

  " We believe the curve steepening will continue as markets digest the Greece news," said George Goncalves, head of U.S. rates strategy at Nomura Securities in New York, in a note to clients.

  Benchmark 10-year notes were trading 13/32 lower in price to yield 2.05 percent, up from 2 percent late Friday, while 30-year bonds were 24/32 lower to yield 3.19 percent from 3.15 percent.

  U.S. markets were closed on Monday for the Presidents Day holiday.

  Shorter-dated Treasuries could come under more pressure this week. In addition to the Treasury's sale of $99 billion in new notes, the Federal Reserve will twice enter the market this week to sell shorter-dated notes.

  The central bank on Tuesday sold $8.61 billion of Treasuries maturing December 2012 through May 2013. On Thursday the Fed is scheduled to sell $8 billion to $8.75 billion of Treasuries maturing April 2014 through February 2015.

  The Fed sales are part of the U.S. central bank's latest stimulus program, dubbed " Operation Twist" under which it is selling shorter-dated securities and buying longer-dated bonds in an effort to lower longer-term borrowing costs.

  " Supply will be a focal point this week, both here and in the euro zone," Action Economics said in a note to clients on Tuesday. " New York Fed Twist operations will be bearish on the surface, with two buybacks totaling between $3 billion and $4 billion, and two sales for between $16 billion and $17.5 billion." (Additional reporting by Chris Reese Editing by Chizu Nomiyama)

NEW YORK, Feb 21 (Reuters) - U.S. stocks ended little changed on Tuesday, paring gains after the Dow rose above 13,000 for the first time since May 2008, and as higher oil prices threatened prospects for the economy.

  The Dow Jones industrial average was up 16.12 points, or 0.12 percent, at 12,965.99. The Standard & Poor's 500 Index was up 1.00 point, or 0.07 percent, at 1,362.23. The Nasdaq Composite Index ended down 3.21 points, or 0.11 percent, at 2,948.57. (Reporting By Angela Moon Editing by Kenneth Barry)

(Adds PSA Peugot Citroen, Comcast)

  Feb 21 (Reuters) - The following bids, mergers, acquisitions and disposals involving European, U.S. and Asian companies were reported by 2000 GMT on Tuesday.

 

  ** PSA Peugeot Citroen, Europe's No.2 car maker, is in advanced alliance talks with U.S. peer General Motors , French online newspaper LaTribune.fr reported on Tuesday citing an unnamed source.

  ** Comcast Corp, the leading U.S. cable company, is launching four new minority-owned cable networks with partners including former basketball star Earvin " Magic" Johnson, hip-hop mogul Sean Diddy Combs and Hollywood director Robert Rodriguez.

  ** Medco Health Solutions Inc, which has agreed to be bought by rival Express Scripts Inc, posted a higher-than-expected quarterly profit as the pharmacy benefit manager increased dispensing of more profitable generic drugs.

  Medco remains confident the $29 billion merger will close in the first half of the year, the company said in conjunction with release of the financial results on Tuesday.

 

  ** Wireless tower operator SBA Communications Corp agreed to buy more than 2,300 tower sites and some antenna assets from affiliates of Mobilitie LLC for about $1.1 billion, as it looks to benefit from an explosion in data traffic.

 

  ** Global private equity firms, including KKR & Co LP and TPG Capital, and strategic rivals, are lining up potential bids for U.S.-listed AsiaInfo-Linkage Inc , sources with direct knowledge of the matter told Reuters, in a deal expected to be worth more than $1 billion.

 

  ** Jack Ma's Chinese e-commerce firm Alibaba Group has offered around $2.5 billion to take its Hong Kong-listed Alibaba.com unit private, stressing the move was unrelated to any possible deal to buy back shares owned by Yahoo Inc.

 

  ** Canadian utility Fortis Inc said it will buy New York's CH Energy Group Inc for about $1 billion to enter the U.S. state-regulated electric and gas distribution business that assures stable return amid weak power demand.

 

  ** Mexican pharmaceutical products company Genomma said on Tuesday it was offering to buy Prestige Brands Holdings Inc, the maker of Comet and Spic and Span cleaners, for $834 million in cash.

 

  ** British industrial landlord Segro plc expects to sell properties worth 300-500 million pounds ($476.08 million-$793.47 million) this year as it focuses on expanding its lucrative London and South East portfolio.

 

  ** U.S. commercial real estate services firm Grubb And Ellis Co filed for bankruptcy protection on Monday and said it has agreed to sell substantially all its assets to BGC Partners Inc.

 

  ** Dragon Oil said profit surged 76 percent in 2011, helped by a production ramp up at its Turkmenistan oil field and a higher oil price, though was silent on whether it would proceed with a takeover bid for explorer Bowleven.

 

  ** AES Corp, the first U.S. power producer to enter China about two decades ago, is looking to sell all or some of its assets there, said three sources familiar with the process, hobbled by not being able to pass on higher coal costs in a state-regulated industry.

 

  ** Futures exchange operator CME Group Inc and an Omani sovereign fund boosted their stake in the Dubai Mercantile Exchange after a cash infusion on Tuesday, diluting positions held by oil majors and the ruler of Dubai's investment vehicle.

 

  ** Dutch freight and delivery group TNT Express posted weaker-than-expected quarterly results and highlighted a bleak economic outlook, undermining its attempts to extract a higher price from its suitor United Parcel Service and attract others.

 

  ** BASF SE announced its third acquisition in battery technology in two months, saying it would buy Merck KGaA's electrolytes business for high-performance batteries to tap into growing demand for electric vehicles.

 

  ** Private equity group BC Partners has raised 6.5 billion euros ($8.6 billion) for new deals, more than it had hoped, to make it the largest buyout fund from a European firm since the onset of the credit crisis.

 

  ** A joint venture between Anglo American and cement maker Lafarge would damage competition in the British market for construction materials, the Competition Commission said, outlining potential remedies which could include forced sales.

 

  ** British engineer AMEC is still looking for a big acquisition, even after announcing a 400 million pound ($635 million) share buyback programme and hiking its 2011 dividend by 15 percent, it said on Tuesday.

 

  ** Dubai-based Abraaj Capital is among companies interested in bidding for the media assets of Turkey's Calik Holding, ATV television and newspaper Sabah, which are being evaluated separately, two sources close to the sale process told Reuters.

 

  ** Pharmacy services provider Omnicare Inc dropped its pursuit of rival PharMerica Corp after U.S. antitrust regulators sued Omnicare last month saying the deal would harm competition.

 

  ** Swedish telecoms gear maker Ericsson is to buy privately-held WiFi technology firm BelAir Networks as part of its plan to boost its mobile broadband offering.

 

  ** Kraft Foods Inc forecast earnings growth of at least 9 percent this year even as it prunes its portfolio of North American brands.

  North America's largest packaged food maker, will separate into two companies later this year. One will focus on snacks like Cadbury chocolate and Oreo cookies, and the other will focus on North American grocery brands including Maxwell House coffee and Oscar Mayer lunch meat.

 

  ** India-focused miner Vedanta, responding to speculation it could merge two separately listed Indian subsidiaries, said on Tuesday it aimed to simplify and consolidate its structure as part of its strategy, but gave no specific detail.

  (Compiled by Shounak Dasgupta in Bangalore)

By Osamu Tsukimori and Yoko Kubota

  TOKYO (Reuters) - Japan is close to agreement with Washington on the size of cuts refiners must make in imports of Iranian crude oil to win waivers from U.S. sanctions, two ministers said Tuesday after a media report the two sides would settle on an 11 percent cut.

  The Yomiuri newspaper, citing unidentified sources, said Japan and the United States reached an agreement at talks last week about the size of cuts to crude imports from Iran, with a formal deal expected by the end of this month.

  Avoiding sanctions is essential to protect the Japanese financial sector's operations abroad, but cutting oil imports could pose a risk to Japan's economy.

  Reliance on oil imports has grown since a 2011 earthquake and tsunami triggered the Fukushima radiation crisis, leading to most nuclear reactors at Japanese power plants being shut down.

  " We are closely negotiating with the United States and are moving forward toward mutual understanding, but it is not the case that we have reached a conclusion," Trade Minister Yukio Edano told reporters.

  Washington is pushing ahead with sanctions because it fears Iran might use its nuclear program to develop nuclear weapons.

  The European Union has imposed its own embargo on oil imports from Iran, to start from July 1. In response, Iran ordered a halt of oil sales to Britain and France Sunday in a move symbolic of Tehran's anger with the West.

  Iran, the biggest producer in OPEC after Saudi Arabia, denies Western suspicions that its nuclear program has military goals, saying it is for purely peaceful purposes.

  NEEDS MORE IMPORTS AFTER FUKUSHIMA DISASTER

  The United States says it will punish financial institutions that deal with Iran's central bank, the main clearing house for oil revenues, by shutting them out of U.S. markets. A country can earn a waiver from the sanctions if it significantly reduces trade with Iran.

  " Many countries have approached us to discuss their efforts to reduce purchases of Iranian crude which, by statute, could except them from sanctions," a senior official in President Barack Obama's administration said.

  " We are discussing specific cases with specific countries. It would be premature to discuss any of them at this time."

  Japan's Foreign Minister Koichiro Gemba also said no agreement has been reached yet. Japan is offering to continue cutting Iranian oil imports but talks are ongoing, a foreign ministry official said earlier.

  One reason Japan may be reluctant to support publicly a reduction in Iranian oil imports with the same vigour as Europe is that Tokyo is worried about damaging close diplomatic ties it has had with Tehran in the past.

  Japan needs to import more oil to make up for declining use of nuclear power after the Fukushima disaster last March triggered the worst nuclear crisis since Chernobyl 25 years ago.

  Public safety fears have prevented the restart of reactors halted for routine checks, and only two of the nation's 54 reactors are still operating. The last of those is due to be shut down by late April.

  Japan is the third-biggest customer for Iranian oil, although its imports of Iranian crude fell 11.7 percent last year to 313,000 barrels per day (bpd), accounting for 8.8 percent of total oil imports. They have declined by more than half from 683,000 bpd in 2003, partly because Iranian oil is more expensive than other Middle Eastern crude.

  If Japan cut Iranian oil imports by 11 percent from last year's level, as the Yomiuri reported, that would amount to a reduction of 34,430 bpd.

  Cosmo Oil Co has already lowered its Iran crude imports to a little below 30,000 bpd from about 40,000 bpd since January, industry sources say.

  Other refiners' imports are seen steady so far this year, but imports are likely to be down further from April, when most annual contracts are renewed. Japanese refiners have been awaiting instructions from the government before launching talks with Iran on annual contracts.

  Although refiners need to replace Iran crude with oil from other sources, buying less Iranian oil could turn out to be beneficial because the threat of sanctions has pushed up the cost of settlements, tanker chartering and insurance.

  Some Japanese refiners are negotiating with top exporter Saudi Arabia to make up for any shortfall.

  Japan's top refiner, JX Nippon Oil & Energy Corp, a unit of JX Holdings, said it has not received any instruction from the government on Iranian oil, including the reported 11 percent cut, and whether Japan will win waivers. Two other refiners had also heard nothing, industry sources said.

  " We are worried because the government is not good at planning ahead," one source at a Japanese buyer of Iranian crude said.

  By contrast, China and South Korea, the two other big Asian buyers of crude, increased imports from Iran last year.

  (Additional reporting by Kiyoshi Takenaka in TOKYO and Alister Bull in WASHINGTON Writing by Stanley White Editing by Michael Watson and Paul Tait)

WASHINGTON, Feb 21 (Reuters) - President Barack Obama and German Chancellor Angela Merkel on Tuesday praised a new European Union deal designed to stave off a chaotic Greek debt default, the White House said.

  White House spokesman Jay Carney told reporters that Obama had spoken with Merkel in a phone call in which the two leaders agreed that the planned EU fiscal pact, recent actions by the European Central Bank, and reforms by Spain and Italy were also positive steps in reducing the eurozone crisis.

  " The president thanked the chancellor for her leadership and welcomed last night's agreement in Europe on a new rescue program for Greece to help reduce its debt to sustainable levels," Jay Carney told reporters. (Reporting By Laura Macinnis Editing by Sandra Maler)

* Dow tops 13,000 for first time since May 2008

  * Oil prices hit 9-month high, prompting selling

  * Wal-Mart falls as profit misses estimates

  * Indexes down: Dow 0.1 pct, S& P 0.1 pct, Nasdaq 0.5 pct

  * For up-to-the-minute market news, see (Updates to late afternoon)

  By Caroline Valetkevitch

  NEW YORK, Feb 21 (Reuters) - U.S. stocks dipped on Tuesday as shares pulled back after the Dow breached 13,000 for the first time since May 2008, the latest big move in stocks' recent rally.

  Greece's securing a bailout to avoid a disorderly default initially supported stocks, but investors said the news had been priced in to the market.

  Climbing oil prices gave investors a reason to sell. U.S. crude oil prices rose 2.5 percent to a nine-month high of $105.84 a barrel on Iran supply worries.

  Signs of improvement in the economy and stabilization of Europe's debt crisis have driven the Dow more than 20 percent higher since late last year, while the S& P has climbed more than 8 percent so far this year.

  Euro zone finance ministers agreed on a 130 billion euro ($172 billion) rescue for Greece to avert an imminent chaotic default after forcing Athens to commit to unpopular cuts and private bondholders to take bigger losses.

  The Dow was trading at 12,938 after briefly trading above 13,000.

  " We're running into some minor selling pressure given the extent of the rally we've seen," said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon, despite the upbeat news on Greece.

  Even with the bailout, Greece faces a long road to economic recovery. European Union officials said the Greek economy will only return to growth in 2014 after a recession that will shrink output by 17 percent.

  Results from retailers were mixed. Wal-Mart Stores Inc shares were the top drag on the Dow, falling 4.2 percent to $59.81, after its quarterly profit came in short of expectations.

  The Dow Jones industrial average was down 11.62 points, or 0.09 percent, at 12,938.25. The Standard & Poor's 500 Index was down 1.97 points, or 0.14 percent, at 1,359.26. The Nasdaq Composite Index was down 15.24 points, or 0.52 percent, at 2,936.54.

  Home Depot Inc shares were up 0.3 percent at $46.86 after the home improvement chain's quarterly profit beat estimates.

  Macy's Inc climbed 3.1 percent to $37.41 as the (Reporting By Caroline Valetkevitch Editing by Kenneth Barry)