(Updates to U.S. open, changes dateline; previous LONDON)
By Stephen Culp
NEW YORK, April 6 (Reuters) - U.S. stocks paused near the previous session's record closing highs and Treasury yields inched lower on Tuesday as investors took stock of recent upbeat data and looked to the Federal Reserve for its economic outlook.
On Wall Street, stocks that stand to benefit most from a reopening economy - cyclicals, small caps, transports - were outperforming the broader market.
This suggests market participants are optimistic about an economic rebound - and corporate earnings - fueled by vaccine distribution, stimulus and a robust infrastructure bill being debated in Washington.
"Investors are taking a breather and looking ahead to earnings, and that's a pattern that we see almost every earnings season," said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield, Connecticut.
"The economic picture has greatly improved in the last three months," Pursche added. "There's a general sense globally that things are improving and will get better rapidly."
Friday's blockbuster U.S. jobs report was followed on Monday by PMI data showing the services sector's fastest expansion on record. This was followed by a PMI report from China that confirmed activity in its services sector is accelerating. U.S. Federal Reserve is expected to release the minutes from its last monetary policy meeting on Wednesday, and market participants will parse it for any changes to the central bank's economic outlook.
"(Investors are) going to be looking for little change, a continued supportive and accommodative Fed that sees little risk from inflation and ideally an improved outlook on economic growth," Pursche said.
The Dow Jones Industrial Average .DJI fell 13.63 points, or 0.04%, to 33,513.56, the S&P 500 .SPX gained 4.8 points, or 0.12%, to 4,082.71 and the Nasdaq Composite .IXIC added 34.25 points, or 0.25%, to 13,739.85.
European markets returned after Monday's holiday to follow Wall Street to record highs as data indicated a swift economic recovery from the global health crisis. pan-European STOXX 600 index .STOXX rose 0.74% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.31%.
Emerging market stocks rose 0.59%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.66% higher, while Japan's Nikkei .N225 lost 1.30%.
U.S. Treasury yields dipped, with 5-year notes leading the decline, on investor views that market pricing based on an earlier-than-expected tightening by the Federal Reserve was too aggressive.
Benchmark 10-year notes US10YT=RR last rose 16/32 in price to yield 1.6649%, from 1.72% late on Monday.
The 30-year bond US30YT=RR last rose 26/32 in price to yield 2.3222%, from 2.363% late on Monday.
The dollar reversed early gains against a basket of world currencies, extending a soft start to April for the greenback.
The dollar index .DXY fell 0.65%, with the euro EUR= up 0.22% to $1.1837.
The Japanese yen strengthened 0.39% versus the greenback at 109.77 per dollar, while Sterling GBP= was last trading at $1.3852, down 0.32% on the day.
Crude oil prices were lifted by strong data from China, partly recovering from the previous session's losses as pandemic-related volatility dominates the market. crude CLcv1 rose 3.55% to $60.73 per barrel and Brent LCOcv1 was last at $64.10, up 3.14% on the day.
Gold prices touched their highest level in more than a week, benefiting from the soft dollar and lower Treasury yields. gold XAU= added 0.8% to $1,742.66 an ounce.
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