NEW YORK-US stocks climbed yes­ter­day in an ab­bre­vi­at­ed hol­i­day trad­ing ses­sion af­ter an en­cour­ag­ing re­port about man­u­fac­tur­ing. En­er­gy stocks rose the most be­cause of in­creased ten­sion over oil-rich Iran. Ma­jor stock in­dex­es wa­vered in ear­ly trad­ing, then moved de­ci­sive­ly high­er af­ter the gov­ern­ment re­port­ed that fac­to­ry or­ders rose in May. Cater­pil­lar, Al­coa, Boe­ing and oth­er stocks that de­pend on man­u­fac­tur­ing rose.

The re­port was wel­come af­ter a trade group re­port­ed on Mon­day that US man­u­fac­tur­ing shrank in June for the first time since Ju­ly 2009, the first month af­ter the Great Re­ces­sion end­ed. The price of oil climbed more than four per cent af­ter Iran threat­ened to block a crit­i­cal Per­sian Gulf ship­ping route. On Sun­day, Eu­rope en­act­ed stricter rules against buy­ing oil from Iran, try­ing to force it to be more open about its nu­clear pro­gramme.

New York crude rose $3.91 per bar­rel to $87.66. The sup­ply fears drove en­er­gy stocks up more than two per cent, more than any oth­er in­dus­try in the Stan­dard & Poor's 500. Chevron rose $1.51, or 1.4 per cent, to $107.37. The Dow Jones in­dus­tri­al av­er­age fin­ished 72.43 points high­er at 12,943.82. The S&P 500 in­dex rose 8.51 to 1,374.02. The Nas­daq com­pos­ite in­dex rose 24.85 to 2,976.08.

In Eu­rope, Ger­many's DAX closed 1.3 per cent high­er at 6,578.21, while the CAC-40 in France rose 1.0 per cent to 3,271.20. The FTSE 100 in­dex of lead­ing British shares gained 0.8 per cent to 5,687.73. Ford and Gen­er­al Mo­tors both jumped af­ter they and oth­er car com­pa­nies re­port­ed high­er sales for June. Over­all car sales still came in slight­ly be­low what an­a­lysts polled by Fact­Set were ex­pect­ing.

Fac­to­ry or­ders in­creased 0.7 per cent in May from April, the Com­merce De­part­ment said. Core cap­i­tal goods, which in­clude ma­chin­ery and com­put­ers, rose 2.1 per cent. That was bet­ter than the 1.6 per cent es­ti­mat­ed last week. Most­ly, in­vestors were in a hold­ing pat­tern, wait­ing for the gov­ern­ment's Fri­day re­port on June em­ploy­ment, and for com­pa­nies to start re­port­ing sec­ond-quar­ter earn­ings next week.

Trad­ing vol­ume was light. The mar­ket closed three hours ear­ly, at 1 pm, and many traders had al­ready tak­en off for the Fourth of Ju­ly hol­i­day. Eu­rope was rel­a­tive­ly qui­et, though with un­der­pin­nings of dis­cord. A Greek gov­ern­ment spokesman said the gov­ern­ment was prepar­ing an "alarm­ing" re­port on its re­ces­sion in a bid to rene­go­ti­ate the terms of its bailout.

Slo­va­kia's prime min­is­ter said his coun­try was run­ning out of pa­tience for bail­ing out its more free-spend­ing neigh­bours. Cyprus opened talks with the Eu­ro­pean Union and the In­ter­na­tion­al Mon­e­tary Fund on a bailout for its trou­bled banks. The Eu­ro­pean Cen­tral Bank will an­nounce lat­er this week whether it will cut in­ter­est rates, a move that would like­ly dri­ve mar­kets high­er but al­so sig­nal that Eu­rope's econ­o­my is still weak. Ma­jor in­dex­es in France, Britain, Ger­many, Spain and Greece rose.

AP