* U.S. stocks open higher; Nokia soars on Microsoft deal
* China services PMI shows growth; oil gains
* Dollar hits 1-month high
By Caroline Valetkevitch
NEW YORK, Sept 3 Stocks rose on Tuesday as U.S.
President Barack Obama's plan to seek congressional
authorization for military action against Syria was expected to
delay any strike for at least several days, while the dollar hit
its highest in over a month against the euro and yen.
The dollar was buoyed by its safe-haven status on
uncertainty about whether the United States will eventually
conduct a military strike against Syria.
Wall Street stocks opened higher after being closed on
Monday for the U.S. Labor Day holiday.
Congress returns from its summer recess on Sept. 9, and any
vote to authorize a strike on Syria will come after that. While
Obama has been pushing Congress to back his plan, passage is by
no means certain, further easing concerns over an imminent
"Going to Congress creates more certainty about the
engagement protocol, and there seems to be a more cohesive
approach as to how the government will proceed. That's very good
for markets," said Steven Baffico, chief executive officer at
Four Wood Capital Partners in New York.
Overseas stocks had fallen following reports Russian radar
had detected two ballistic 'objects' heading toward the eastern
Mediterranean. But confirmation from Israel that it was a test
firing helped markets recover by midday.
Shares of Microsoft fell 4.5 percent to $31.91
after it announced a $7.2 billion bid for the phone business of
once-dominant Finnish manufacturer Nokia. U.S. shares
of Nokia shot up 38.7 percent to $5.41.
The Dow Jones industrial average was up 96.59 points,
or 0.65 percent, at 14,906.90. The Standard & Poor's 500 Index
was up 15.97 points, or 0.98 percent, at 1,648.94. The
Nasdaq Composite Index was up 42.82 points, or 1.19
percent, at 3,632.69.
MSCI's world equity index, which tracks
shares in 45 countries, was up 0.6 percent, while European
stocks were little changed.
U.S. Treasuries prices added to losses after data showed the
U.S. manufacturing sector grew last month at its fastest pace in
more than two years.
Benchmark 10-year U.S. Treasury notes last
traded down 31/32 in price with a yield of 2.904 percent. The
bond market also was closed on Monday for the Labor Day holiday.
Focus remains on what the Federal Reserve will do with its
$85 billion-a-month stimulus program this month.
Traders expect the Fed to start reducing its stimulus at its
Sept. 17-18 policy meeting unless U.S. payroll numbers due on
Friday fall considerably short of forecasts.
While tapering expectations support the dollar, a near-term
withdrawal of stimulus would weigh on stocks, particularly those
in emerging markets that have come under pressure in recent
months on expectations of capital outflows.
The euro fell to $1.3157, its lowest since July 22,
and was last trading 0.1 percent lower at $1.3180. Its weakness
caused the dollar index to gain 0.4 percent to 82.418,
near its highest level in a month.
The dollar rose as high as 99.70 yen, near its Aug. 2
peak of 99.94 yen, after having gained more than 1 percent on
Australia's dollar bounced more than half a cent as
its central bank kept interest rates at a record low 2.5
percent, as expected, on Tuesday.
Oil futures were higher, supported by worries over any wider
conflict in the Middle East threatening already stretched
After Monday's upbeat round of global data, China's
non-manufacturing purchasing managers' index dropped slightly to
53.9 last month from July's 54.1. But it remained solidly in
expansion territory and suggested recent government measures are
supporting the economy.
Brent crude oil prices edged back above $115 a barrel
as the firm China data combined with the ongoing geopolitical
uncertainty, while U.S. crude was at $108.09, up 44