Oil prices edged higher, with Brent trading above $115 after an earlier drop as unrest in Yemen raised concerns about a further threat to supply from the Gulf region.

The euro retreated from a 4-1/2-month high against the dollar but expectations that the European Central Bank will hike interest rates next month could limit any downside for the currency.

Economic data has taken a back seat to world events as investors fretted over the extent of nuclear reactor damage in quake-stricken Japan, while political instability in the Middle East and North Africa has kept oil prices volatile.

The MSCI global stocks index was up 0.2 percent, boosted by an overnight rise in Japanese stocks, but European and US equity benchmarks fell slightly.

Tokyo's benchmark Nikkei average added 4.4 percent as traders returned from a national holiday. Progress in attaching power cables at the stricken nuclear plan encouraged traders to buy domestic shares after last week's losses of more than 10 percent. Later in the day, US dollar-denominated Nikkei futures dipped after three days of gains.

"There is a lot of volatility and a lot of uncertainties surrounding Japan and Libya," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills, New York.

"Neither one of the situations looks quite ready to settle down yet and that could drag out for some time and weigh on the market."

The Dow Jones industrial average dropped 11.43 points, or 0.09 percent, to 12,025.10. The Standard & Poor's 500 fell 2.87 points, or 0.22 percent, to 1,295.51. The Nasdaq Composite lost 6.89 points, or 0.26 percent, to 2,685.20.

EURO RETREATS, GOLD UP

In currency markets the euro dipped after hitting $1.4249 versus the US dollar, its highest level since November, as it ran into what traders said were options-related barriers.

The dollar also had hit a a 15-month low against other major currenciesbut later ticked up.

Gold was on track for a fifth day of gains, fed by investor demand for safe-haven assets as traders eyed Libya and unrest in the Middle East.

In addition to turmoil in the Middle East, oil prices were boosted by the weakened dollar. US crude rose nearly 1 percent above $103 per barrel.

US Treasuries were little changed in low volume as investors looked for further progress in Japan and the Middle East. Benchmark 10-year notes were last down 4/32 in price to yield 3.34 percent.