LONDON: With market jitters over Greece receding, Goldman Sachs is advising clients to load up on European stocks at the expense of US assets.

The investment bank upgraded its short-term view on European equities to “overweight” from “neutral” in a note dated July 20, which cited the recent deal to start negotiating a new Greece debt package as one of the reasons for a more positive view, and downgraded US equities to “underweight” from “neutral.”

The euro’s weakness against the dollar, the European Central Bank’s quantitative-easing program and accelerating economic growth should fuel European stocks’ outperformance versus US stocks, the note said.

The STOXX Europe 600 has rallied nearly nine percent in the last two weeks, as an impasse between Greece and its creditors was broken and they agreed a cash-for-reform deal.

“European equities have been one of the key asset classes to benefit from a fading of Greek risks,” Goldman Sachs strategists said.

“While performance potential might be limited in the near-term after the strong rebound, several supportive fundamental factors should help outperformance of European vs. US equities until year-end.”

The Dow fell in early trade on Tuesday following disappointing earnings from IBM and United Technologies, as the market looked ahead to results from Apple later in the day.

About 30 minutes into trade, the Dow Jones Industrial Average stood at 17,981.85, down 118.56 points (0.66 percent).

The broad-based S&P 500 slipped 0.40 (0.02 percent) at 2,126.16, while the tech-rich Nasdaq Composite Index gained 9.67 (0.19 percent) to 5,228.53. The Nasdaq has notched record highs the last three sessions.