World stocks set for 12th month of gains, dollar nudges up

By Sinead Carew

NEW YORK (Reuters) - World stocks headed for a record twelfth month of gains as Europe outshone Wall Street on Tuesday while the dollar edged up and U.S. Treasury yields were steady.

Wall Street had a choppy morning while European stocks hit a 5 1/2-month high as data showed euro zone growth of 2.5 percent year-on-year and unemployment at its lowest since early 2009.

Strong earnings from Oreo cookie maker Mondelez

boosted the S&P, while Pfizer's report weighed.

"We're still in the thick of earnings and have seen some high-profile companies driving the market a lot," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

The Dow Jones Industrial Average rose 21.54 points, or 0.09 percent, to 23,370.28, the S&P 500 gained 2.72 points, or 0.11 percent, to 2,575.55 and the Nasdaq Composite added 22.76 points, or 0.34 percent, to 6,721.72.

The dollar index, which measures the greenback against major currencies, was set for its biggest monthly rise since November 2016.

It rebounded slightly from its Monday decline after Federal investigators probing Russian interference in the 2016 U.S. election charged President Donald Trump's former campaign manager, Paul Manafort, and aide Rick Gates, with money laundering.

"There's a lot of moving parts to the market this week," said Shaun Osborne, currency strategist at Scotia Bank in Toronto, citing central bank meetings, data and expectations Trump would announce his Federal Reserve chairperson choice.

Market participants were watching for "another shoe to drop" in the Russia probe, he said.

The dollar index rose 0.08 percent, with the euro down 0.13 percent to $1.1634.

U.S. Treasury prices were steady as investors braced for events that could prompt volatility. Wednesday's potential catalysts include the Treasury Department's refunding plans, the conclusion of the Federal Reserve's two-day policy meeting, and a possible tax bill introduction.

Benchmark 10-year notes last fell 1/32 in price to yield 2.3739 percent, from 2.37 percent late on Monday.

The 30-year bond last rose 4/32 in price to yield 2.8746 percent, from 2.88 percent late on Monday.

RECORD RUN

The MSCI's 47-country 'All World' index was set to top its 2003 run of 11 straight months of gains. It gained 0.09 percent Tuesday.

MSCI's index of Asia-Pacific shares outside Japan ended up 0.4 percent. Strong gains in South Korea helped offset weakness in China and Hong Kong after disappointing industrial data from China.

South Korea's KOSPI ended up 1 percent at a record high after Seoul and Beijing agreed to normalize relations that have been strained by a year-long standoff over the deployment of a U.S. anti-missile system in South Korea.

Oil prices steadied after a week of gains as the prospect of increasing U.S. exports dampened bullish sentiment that has driven Brent to more than two-year highs above $60 per barrel.[nL4N1N6256]

U.S. crude fell 0.18 percent to $54.05 per barrel and Brent was last at $60.46, down 0.21 percent on the day.

Spot gold dropped 0.5 percent to $1,270.02 an ounce. It was on track for its second straight monthly decline.

(Additional reporting by Dion Rabouin in New York, Sruthi Shankar in Bengaluru, Marc Jones in London, Shinichi Saoshiro in Tokyo; Editing by Peter Graff and Nick Zieminski)