Wall Street lifts slightly

United States stocks edged higher, paring early gains, as worries about military strikes in Syria and a rise in Treasury yields took the shine off strong global economic data.

The Dow Jones Industrial Average gained 23.65 points, or 0.16%, to 14833.96, after rising as much as 123 points earlier in the session.

The S&P 500-stock index tacked on 6.88 points, or 0.42%, to 1639.77, and the Nasdaq Composite Index rose 22.74 points, or 0.63%, to 3612.61.

Consumer discretionary and financials were among the best performing sectors, while utilities were weak. Within the Dow, Microsoft dropped 4.9% and Verizon Communications lost 3.1% after the companies announced large acquisitions.

Stocks started the day broadly higher after President Barack Obama said over the weekend that he would seek congressional approval before launching limited military strikes against Syria. That was seen as delaying any attack, as Congress isn't expected to hold votes on the need for military action until next week.

In addition, better-than-expected data on manufacturing activity and construction spending backed upbeat data out of Europe and China on Monday. Stocks started pulling back from early highs, however, after House Speaker John Boehner said he supports President Barack Obama's call for military action against Syria.

"The outlook [for the market] is hinging on what's going to take place in Syria," Kent Engelke, chief economic strategist at Capitol Securities Management. "Whenever you head into military action, the outcome is unquantified, and markets hate anything that's unquantified."

"The odds of a military strike against Syria seemed to increase during the day," said James Meyer, principal and chief investment officer at Tower Bridge Advisors.

The rise in Treasury yields on the back of strong economic data also helped take the steam out of the early rally, Mr. Meyer said.

The yield on the 10-year Treasury note jumped to 2.852% from 2.747% on Friday, following strong manufacturing data out of the U.S. and from Europe and China over the weekend. The yield reached a high of 2.911% in intraday trading, just below a two-year high reached on August 22.

The Institute for Supply Management's manufacturing purchasing managers' index for August rose more than expected. Construction spending for July also increased more than forecast.

On Monday, Markit said the euro-zone manufacturing purchasing managers' index for August rose slightly above a previously announced reading. In addition, China's official manufacturing purchasing managers' index for August also increased.

Elsewhere, the Stoxx Europe 600 slipped 0.4%. Japan's Nikkei Stock Average jumped 3%, extending gains from the previous session, while China's Shanghai Composite Index advanced 1.2%.

"The growth numbers coming out of Europe and China are encouraging for the market," said Colleen Supran, a principal of San Francisco-based wealth-management firm Bingham, Osborn & Scarborough, which manages about $US2.5 billion ($2.8 billion).

The US government's report on nonfarm payroll growth and the unemployment rate for August is due Friday. The Federal Reserve has said the strength of the labor market is a key driver of its decision on when to start reducing monetary stimulus. Some investors believe the Fed could start trimming its bond-purchasing programs as early as this month, after the Fed's next policy setting meeting on September 18.

Ms Supran said that while investors are encouraged about the US data and the fact that the Syria situation may be on hold for a while, the key to the market's outlook will be Friday's jobs data. "What decisions can you make until Friday?" she said.

"Given all the recent data, there's no reason to expect a very weak number on Friday," said Tower Bridge Advisors' Mr Meyer. "But that doesn't mean it can't happen."

Worries about Syria helped push up crude oil and gold prices. Oil erased early losses to settle up 0.8% to $US108.54 a barrel on the New York Mercantile Exchange, while gold rose 1.1% to $US1,412 a troy ounce.

In deal news, Microsoft announced late Monday that it would acquire Nokia's cellphone business, in a deal valued at more than $US7 billion. The US-listed shares of Finland's Nokia soared 32%.

Fellow Dow component Verizon Communications declined after the company agreed on Monday to buy Vodafone Group's 45% stake in their US wireless joint venture Verizon Wireless. The US-listed shares of the UK's Vodafone slipped 1.3%.