NEW YORK (Reuters) - The euro hit a two-month high against the dollar on Thursday after Greece agreed to an austerity package in exchange for new funds but questions on whether the deal will be enough to avoid a messy default curbed stocks' gains.

News that Greek leaders had clinched a long-stalled deal just hours before a key meeting with the country's financial backers encouraged investors to take on some risk, driving down prices of safe-haven U.S. Treasuries.

Oil prices rallied more than 1 percent on the agreement, which is crucial for Greece to secure a 130 billion euro ($172 billion) bailout from the European Union and the International Monetary Fund.

Still, investors wondered whether Greece's promises will be enough to secure the funds, as well as what contribution the European Central Bank will offer in the restructuring of Greek debt.

"Today's pledge by Greece's main political leaders to accept the terms for a second bailout is of limited significance," said Nicolas Spiro, managing director at Spiro Sovereign Strategy in London.

"The causes of the failure of the first bailout have yet to be addressed. Market concerns center around the orderliness of the Greek restructuring and its implications for the rest of the periphery, notably Portugal," he added.

Adding to the uncertainty, Dutch Finance Minister Jan Kees de Jager said a final decision on a second bailout package for Greece will not be taken on Thursday.

On Wall Street, investors seemed tempted to take profits, keeping a lid on key stock indexes.

"There is definitely a whiff of 'sell the news' in the air," said Michael Marrale, managing director and head of sales trading at RBC Capital Markets in New York. "We've climbed this wall of worry and the first reaction for people is to hit the sell button."

After spending most of the morning session little changed, the Dow Jones industrial average .DJI was up 30.73 points, or 0.24 percent, at 12,914.68 in afternoon trading. The Standard & Poor's 500 Index .SPX was up 3.85 points, or 0.29 percent, at 1,353.81. The Nasdaq Composite Index .IXIC was up 8.71 points, or 0.30 percent, at 2,924.57.

In Europe, the FTSEurofirst 300 index .FTEU3 index of top shares closed 0.25 percent higher, with cyclical shares such as those of automakers in high demand.

"The market has potential to go up further. Economic support is there and earnings are continuing to do well," said Anko Beldsnijder, managing director at MainFirst Asset Management, which manages 1 billion euros ($1.33 billion).

World stocks measured by the MSCI All-Country World Index .MIWD00000PUS gained 0.25 percent.

The euro strengthened 0.2 percent to $1.328, after hitting a two-month high of 1.3321.

Also supporting the European single currency were comments from ECB President Mario Draghi, who said the euro zone outlook, while uncertain, had stabilized.

"That poured a little cold water on expectations of a March rate cut," said Adnan Akant, head of foreign exchange at Fischer Francis Trees & Watts, with $48 billion in assets.

Benchmark 10-year U.S. Treasury notes fell 21/32 in price, which took its yield up to 2.05 percent. Lower-than-expected claims for unemployment benefits in the U.S. also contributed to reduce the appeal of Treasuries.

Prices of 30-year Treasuries fell 1-6/32, taking the yield up to 3.21 percent. They trimmed part of their losses after a well-bid auction of 30-year bonds.