World stocks were little changed on Tuesday as a four-day Wall Street rally stalled but oil prices jumped more than $1 after Iran threatened to cut off a key oil shipping route through the Strait of Hormuz.
The euro was stuck near an 11-month low as investors feared thin market liquidity could complicate Italy's plans to raise 8.5 billion euros in capital markets later in the week.
Trading volumes were low in most markets as traders returned to their desks for the shortened week between the Christmas and New Year holidays.
U.S. stocks halted a four day-rally that turned the S&P 500 positive for the year after a report showed U.S. single-family home prices fell more than expected in October, in a reminder of the challenges facing the housing market.
Another report showing U.S. consumer confidence rose more than expected in December did little to boost stocks, although some analysts said the market could still rise in the final days of the year.
We'll probably have a slight drift upwards but there's not a lot of volume, said Doug Roberts, chief investment strategist at Channel Capital Research.com in Shrewsbury, New Jersey. In the absence of any bad news we could see a drift up over the next four days.
The Dow Jones industrial average was up 17.26 points, or 0.14 percent, at 12,311.26, while the Standard & Poor's 500 Index rose 1.98 points, or 0.16 percent, at 1,267.31. The Nasdaq Composite Index gained 7.61 points, or 0.29 percent, at 2,626.25.
In Europe, the FTSEurofirst 300 index of top shares closed practically flat at 990.35 points, with a fall in the stocks of Italian banks weighing on the broader market. Equity markets in Britain, Hong Kong and Australia remained closed.
The MSCI All-Country World index edged higher 0.09 percent but remained 9.1 percent lower for the year.
The euro traded at $1.3074, little changed on the day and near an 11-month low of $1.2945 -- a level touched earlier in the month.
The single European currency could suffer more selling if Italy struggles to raise money at this week's year-end debt auction, analysts said. The country intends to sell 8.5 billion euros in three- and 10-year bonds on Thursday.
I think there could be some downside risks for the euro. (Thursday's auction) will be more of a test of the market, given that the bonds auctioned are longer maturities, said Sverre Holbek, currency strategist at Danske in Copenhagen.
A further rise in Italian yields should almost certainly be euro negative, and thin liquidity may exacerbate the move.
Italian 10-year borrowing costs were little changed at 7.02 percent, a level viewed as unsustainable in the long-run for a country facing a national debt of around 120 percent of GDP. It faces around 150 billion euros of debt refinancing in February-April alone.
Benchmark 10-year U.S. Treasury notes were up 4/32 in price, with the yield at 2.0069 percent.
U.S. crude oil prices were $1.42 higher at $101.10 a barrel on concerns about disruptions in supplies from the Middle East.
Facing the threat of further sanctions by the European Union by the end of January over its nuclear program, Iran said it would stop flows through the Gulf strait, which transits crude from Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq.
U.S. crude oil futures and gold have been among the top-performing assets in 2011, with year-to-date rises of about 9 percent and 12 percent, respectively.
Gold prices hovered around $1,600 an ounce, however, as investors stayed on the sidelines in the final week of the year.
(Additional reporting by Ryan Vlastelica; Editing by Kenneth Barry)