By Sinead Carew
NEW YORK (Reuters) - The euro recovered from a multi-month low against the U.S. dollar on Tuesday as investors pared bets that the European Central Bank will soon ease policy further, while crude oil remained under pressure from oversupply concerns.
After falling 0.5 percent on Monday, the S&P 500 benchmark index of stocks touched its highest in almost four weeks before giving back gains after a batch of mixed U.S. economic data.
The U.S. manufacturing sector contracted in November to its worst level since June 2009, while construction spending rose in October to the highest level since December 2007.
The data comes ahead of Friday's crucial jobs report and the expected first U.S. interest rate hike since 2006, which most analysts expect to happen this month after the Federal Reserve's Dec. 15-16 meeting.
Investors are having a hard time reading how the U.S. holiday shopping season is doing and the outlook for oil prices, said Katrina Lamb, head of investment strategy and research at MV Financial in Bethesda, Maryland.
"What you're seeing in the market is a lack of direction," said "It's the lack of a good story either way to tell me to start loading up on things, or to tell me that I should be running for the hills."
The Dow Jones industrial average <.DJI> rose 117.59 points, or 0.66 percent, to 17,837.51, the S&P 500 <.SPX> gained 15.39 points, or 0.74 percent, to 2,095.8 and the Nasdaq Composite <.IXIC> added 35.78 points, or 0.7 percent, to 5,144.44.
Manufacturing activity deteriorated across much of Asia in November and while European factory reports improved, the region struggled to gather momentum.
The FTSEurofirst 300 <.FTEU3> fell 0.4 percent, but Wall Street's advance and a near 2-percent gain in Hong Kong's Hang Seng index <.HSI> kept MSCI's measure of stocks in major markets <.MIWD00000PUS> up 0.9 percent.
Crude oil prices were mixed on oversupply concerns ahead of OPEC's policy meeting later this week.
Brent crude futures
The euro was last up 0.64 percent at $1.0632 while the dollar index <.DXY>, which measures the greenback against six major peers was 0.4 percent lower at 99.806.
The euro's rise stemmed from doubts whether the ECB would add further to economic stimulus at a meeting on Thursday, and after the European data. The single currency had fallen about 8 percent against the dollar > since mid-October.
"It's not a serious change in the underlying disposition of the euro, the dollar, the ECB and the Fed," said Joe Trevisani, chief market strategist at WorldWide Markets in Woodcliff Lake, New Jersey.
U.S. Treasury debt prices rose with yields touching near one-month lows.
U.S. benchmark 10-year Treasury notes > were up 16/32 in price to yield 2.161 percent, down sharply from a yield of 2.218 percent on late Monday.
Spot gold >, down for the past six weeks, was up about 0.4 percent at $1,068.71 an ounce, as the dollar weakened.
(Reporting by Rodrigo Campos, additional reporting by Tanya Agrawal and Dion Rabouin; Editing by Nick Zieminski)
