By Michael Connor
NEW YORK (Reuters) - Equity markets inched ahead on Thursday, with investors brushing aside mixed economic data in Europe and the United States, while the dollar slipped after a three-day rally and U.S. Treasury yields declined.
Oil prices rallied almost 3 percent, with Brent crude topping $66 a barrel on signs a global supply glut may be starting to ease.
Wall Street's benchmark S&P 500 index, which has posted a string of highs recently, was near a new record ahead of a speech on Friday by Federal Reserve Chair Janet Yellen. Market participants await her comments for indications of how soon the Fed is prepared to raise U.S. interest rates from near zero.
Fed officials believe it would be premature to raise rates next month even though most feel the economy is set to rebound from a dismal start to the year, according to minutes from their April policy meeting.
Investors shrugged off weaker-than-expected U.S. manufacturing and other data, including a rise in weekly claims for state unemployment benefits reported by the U.S. Labor Department.
The Dow Jones industrial average <.DJI> was last up 17.38 points, or 0.1 percent, to 18,302.78, the S&P 500 <.SPX> was ahead 6.28 points, or 0.3 percent, to 2,132.13 and the Nasdaq Composite <.IXIC> advanced 19.52 points, or 0.38 percent, to 5,091.26.
U.S. Treasuries yields declined on the disappointing data, which revived worries among bond investors about the economy and whether the Fed would raise interest rates later this year.
Benchmark 10-year Treasuries were up 16/32 in price with a yield of 2.193 percent, down six basis points from Wednesday's close.
"The economic news is still soft in the second quarter," said Gary Pollack, head of fixed-income trading for private wealth management at Deutsche Bank Asset and Wealth Management in New York.
The dollar index <.DXY> was down 0.24 percent, as the euro rose against the dollar. The euro last traded at $1.1134, a gain of 0.40 percent. Sterling was ahead nearly 1 percent against the dollar to $1.5678.
European share indexes closed mostly ahead, recovering from session lows after data pointed to contrasting fortunes in major euro zone economies. German private-sector growth slowed again in May, and France extended its timid recovery.
The pan-European FTSEurofirst 300 index <.FTEU3> ended up 0.4 percent after having traded as much as 0.4 percent lower. France's CAC <.FCHI> was up 0.3 percent.
Euro zone leaders were scheduled to meet in Latvia, with Greek premier Alexis Tsipras hoping to secure a broad outline of a cash-for-reforms deal to stave off a default.
But German Finance Minister Wolfgang Schaeuble told Reuters the Greek government's optimism about clinching a deal in the coming days was not justified and that he could not rule out it becoming insolvent.
Oil rose for a second day and Brent crude reached more than $66 a barrel, supported further by fighting in Iraq. U.S. crude
Gold held in a range near $1,200 an ounce.
(Editing by Meredith Mazzilli and Bernadette Baum)
