By Herbert Lash
NEW YORK (Reuters) - World shares extended a run of record highs on Tuesday on signs of strong economic growth, while the dollar was slightly weaker against the euro as investors squared positions after a three-week rally and before several days of heavy U.S. data.
MSCI's gauge of world stock performance hit a fresh all-time high, the three major stock indexes on Wall Street closed at record highs and overnight in Tokyo stocks hit two-year highs.
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The gain in the MSCI benchmark was its 10th record high since late July and extended the year's slew of records to more than 40 with little indication the run is about to end.
European shares closed higher at more than three-month highs while Spanish blue chips <.IBEX> were little changed as the central government and Catalonia appeared to carefully weigh their next move after Sunday's violence-marred independence vote.
Investors want to know if the equity bull market has peaked but with earnings still growing, shares can continue to go up, said Frances Hudson, global thematic strategist at Aberdeen Standard Investments in Edinburgh.
"In the case of the market going higher and higher, the flows have been out of the U.S. equities. So if the market is going higher it's another driver, and the other driver is probably earnings," said Hudson, speaking in New York.
In the latest sign of economic growth, Delta Air Lines reported that its "cargo ton miles" metric rose 9.4 percent in September from a year earlier.
While margins deteriorated because of Hurricanes Harvey and Irma, cargo revenue was a bright spot for Delta, Cowen & Co. reported. Delta shares closed up 6.6 percent, the sixth-largest contributor to the benchmark S&P 500 index's surge.
It was the second consecutive day that the three major indexes on Wall Street closed at record highs.
The Dow Jones Industrial Average <.DJI> rose 76.28 points, or 0.34 percent, to 22,633.88. The S&P 500 <.SPX> gained 3.19 points, or 0.13 percent, to 2,532.31 and the Nasdaq Composite <.IXIC> added 7.07 points, or 0.11 percent, to 6,523.79.
The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.19 percent to close at 1,535.44 and MSCI's index of stock performance in 47 countries <.MIWD00000PUS> gained 0.37 percent.
Companies in the S&P 500 paid a record $105.4 billion in dividends in the third quarter and are trending higher in the fourth quarter, S&P Dow Jones Indices said. Dividends for 2017 are on track to post a 7 percent gain, S&P said.
"The fact dividends are up is very positive," said David Joy, chief market strategist at Ameriprise Financial Services Inc. "The strength of the economy both at home and abroad is producing pretty good corporate earnings," he said.
The dollar rose slightly against the Japanese yen, but slipped against the euro.
The dollar index <.DXY> was up 0.01 percent, with the euro <EUR=> up 0.15 percent to $1.1748 as the yen weakened 0.11 percent versus the greenback at 112.86 per dollar.
Stronger U.S. data, along with the prospect of U.S. tax cuts and the likelihood of a further interest rate hike in December, have boosted the U.S. currency in recent weeks.
Oil prices dipped as speculators took profits for a second day after big third-quarter gains, but prospects for reducing the global crude glut lent support.
Brent <LCOcv1> settled down 12 cents at $56.00 per barrel, while U.S. crude <CLcv1> fell 16 cents to settle at $50.42.
U.S. Treasury debt yields were slightly lower in volatile trading as market sentiment remained cautious.
Benchmark 10-year notes <US10YT=RR> last rose 3/32 in price to yield 2.3247 percent.
U.S. gold futures <GCcv1> for December delivery settled down $1.20 at $1,274.60 per ounce.
For a graphic on world FX rates in 2017 click http://tmsnrt.rs/2egbfVh
(Reporting by Herbert Lash; Editing by Nick Zieminski and Chizu Nomiyama)