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U.S. stocks higher in early trade, led by utilities

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Dollar dips after four sessions of gains

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U.S. Treasury yields pare declines after manufacturing

data

(Updates with U.S. market open)

By Chuck Mikolajczak

NEW YORK, Jan 3 (Reuters) - A gauge of global stocks

pushed higher on Friday but remained on track for a weekly

decline, while the dollar tired after its recent rally but found

support from a stronger than expected U.S. manufacturing survey.

U.S. stocks rose in early trade as the S&P 500 and Nasdaq

attempted to snap a five session streak of declines, their

longest since mid-April. Gains were broad, with each of the 11

major S&P sectors on the plus side, led by gains in utilities

.

The U.S. currency rallied late last year as investors bet

President-elect Donald Trump's policies would drive growth and

inflation, meaning fewer further rate cuts from the Federal

Reserve and higher yields on U.S. Treasuries, while European

central banks are set to keep cutting rates.

The Fed's December policy statement led investors to reduce

expectations for the amount of cuts from the central bank in

2025.

"It's a complicated picture. At first, investors were

thinking back in November that (election results) is a wonderful

thing because it is a clear market friendly result," said Peter

Andersen, founder of Andersen Capital Management.

"The main issue people will start focusing on is if his

(Trump's) decisions will be inflationary and, if they are, does

that signal that the Fed will do an abrupt course change and

start raising rates."

The Dow Jones Industrial Average rose 174.10

points, or 0.41%, to 42,565.96, the S&P 500 rose 35.43

points, or 0.60%, to 5,904.03 and the Nasdaq Composite

rose 151.10 points, or 0.78%, to 19,431.27.

MSCI's gauge of stocks across the globe

rose 3.17 points, or 0.36%, to 842.95 - on track for its biggest

daily percentage gain since Dec. 24 - but still poised for its

third weekly decline in the past four.

In Europe, equities were lower, with the pan-European STOXX

600 index off 0.5% but on track for a second straight

weekly gain.

Trading volumes were on light at the end of a

holiday-shortened week.

The dollar index, which measures the greenback

against a basket of currencies, fell 0.05% to 109.18 but pared

losses after the Institute for Supply Management (ISM) said a

key manufacturing index increased more than expected 49.3 last

month, the highest reading since March, from 48.4 in November.

The greenback was on track for its biggest weekly percentage

gain since mid-November, up about 1.4%, and its fifth straight

week of gains, having hit a two-year high of 109.54 in the prior

session.

The euro was up 0.11% at $1.0276 but set for its

fifth straight weekly loss and its largest weekly percentage

drop since mid-November.

Against the Japanese yen, the dollar weakened 0.04%

to 157.46 while the British pound strengthened 0.07% to

$1.2389.

The yield on benchmark U.S. 10-year notes was

down 0.4 basis point at 4.573%, remaining above the 4.5% mark

that has proven problematic for equities, after reaching a an

8-month high of 4.641% earlier this week.

U.S. crude rose 0.83% to $73.74 a barrel and Brent

rose 0.46% to $76.28 per barrel, buttressed by colder

European and U.S. weather and additional economic stimulus

announced by China.