NEW YORK The U.S. dollar hit a four-week high against the yen on Tuesday and a gauge of global equities rose, supported by gains in Japanese and U.S stocks.
Wall Street stocks rose as data showed new orders for U.S. factory goods climbed for a second straight month in May, adding to tentative signs of stabilization in manufacturing.
Sales of pickup trucks fueled strong demand for new vehicles in the United States in June, driving the industry toward its strongest month since before the recession and pointing to another bright spot in the world's largest economy.
Trading will likely be thin this week, with U.S. markets closing early on Wednesday and all of Thursday for the U.S. Independence Day holiday. The lower volume could signify greater volatility, especially with the release of the U.S. non-farm payroll report on Friday.
"While all eyes are on the payroll report, markets are holding up," said Todd Schoenberger, managing partner at LandColt Capital in New York. "We'll mostly tread water until Friday, but people aren't selling their gains."
The Dow Jones industrial average rose 38.26 points, or 0.26 percent, at 15,013.22. The Standard & Poor's 500 Index was up 5.71 points, or 0.35 percent, at 1,620.67. The Nasdaq Composite Index was up 10.90 points, or 0.32 percent, at 3,445.39.
In Europe, the broad FTSEurofirst 300 index fell 0.5 percent, weighed down by a near 9 percent drop in Fresenius Medical Care(FMEG.DE) after the U.S. agency in charge of state-run health schemes proposed bigger-than-expected cuts to reimbursements for dialysis providers.
Traders were keeping an eye out for New York Fed President William Dudley, who will speak later on the state of the economy. Comments from Federal Reserve officials have recently turned markets on their heads as traders try to guess how soon the central bank will start to wind down its $85 billion monthly bond purchases.
This quantitative easing program has been instrumental for the rally in stocks and has helped keep interest rates near historic lows.
"It's really all about the data later this week, especially the U.S. employment report, where the market be looking for further clues on Fed tapering," said Michael Hewson, senior market analyst at CMC Markets.
The dollar hit a four-week high against the yen and rose to a five-week peak against a basket of currencies .DXY on expectations Friday's June jobs data will bolster the chances that the Fed will scale back stimulus measures sooner than expected.
The yen was last at 100.43 against the dollar.
"There's still a bias overall for a stronger dollar because of tapering expectations," said Brian Kim, currency strategist at RBS Securities in Stamford, Connecticut. "Although some Federal Reserve officials have tried to temper these expectations, the market view is that tapering will come sooner, rather than later."
The yen's weakness helped Japan's Nikkei index close 1.8 percent higher, above 14,000 for the first time in five weeks, as blue-chip exporters rose.
The euro fell 0.4 percent to $1.3016 and hit a low of $1.2989, near last week's trough of $1.2983, which was its lowest since early June.
Prices of U.S. Treasuries traded little changed as investors paused before the U.S. holiday and labor market data.
"The market's in a bit of a holding pattern as we await Friday's employment report," said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.
The benchmark 10-year Treasury note was down 4/32 in price to yield 2.4898 percent.
Interest rates on some Treasury bills turned negative as investors scrambled for cash-like assets to guard against volatile trading that could come from Friday's payrolls data.
With Greece due to repay 2.2 billion euros of bonds in August, yields on 10-year Greek bonds were up 12 basis points at 11.16 percent.
Portugal's bond yields widened 28 basis points to 6.68 percent after the finance minister quit.
In commodities trading, Brent crude rose above $103 a barrel, extending gains to a second day due to concerns about supply disruptions in the Middle East and Africa. U.S. crude was up 92 cents $98.91.
Copper fell from a near two-week high in the previous session as a stronger dollar weighed on the price and investors remained concerned about economic prospects in top metals consumer China.
Three-month copper traded down 1 percent to $6,912, partly reversing the previous session's 3.4 percent rally.
(Additional reporting by Richard Hubbard, Gertrude Chavez-Dreyfuss, Luciana Lopez and Ryan Vlastelica; Editing by Dan Grebler)