GLOBAL MARKETS-Wall St set for weekly gain, monthly loss; Treasury yields advance

(Updates to US markets open)

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S&P headed for first monthly drop since April

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CME Group outage disrupts futures trading, affecting market liquidity

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Fed Rate cut bets solidify

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Signs of strength mixed with caution in early Black Friday sales reports

By Stephen Culp

NEW YORK, Nov 28 (Reuters) - U.S. stocks followed their European counterparts higher in a truncated, post-holiday session on Friday that was complicated by an outage at an exchange operator as investors closed the book on a tumultuous month and kicked off the holiday shopping season.

The three major U.S. stock indexes were modestly higher, benchmark Treasury yields strengthened, and gold advanced.

All three indexes appear set to log gains for the holiday-shortened week, on growing optimism that the U.S. Federal Reserve will cut interest rates at its December meeting. The indexes are on track for November losses, however, as risk appetite was soured during the month by the longest-ever U.S. government shutdown and simmering worries over inflated tech stock valuations.

It would mark the S&P 500's first monthly drop since April.

CME OUTAGE RESOLVED An outage at CME Group, the world's largest exchange operator, caused mayhem in financial markets as trading was frozen on its currency platform and futures, affecting foreign exchange, commodities, Treasuries and stocks. The issue was resolved with less than an hour to go before the U.S. market opened.

"I think (the CME outage) has been brushed aside and we won't hear anything more about it," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. "We'll see how it unwinds throughout the day, but I think volume will be very low."

U.S. equities trading ends at 1 p.m. ET (1800 GMT), while the bond market closes an hour later. The crucial holiday shopping season is officially in full swing and appears to be off to a solid start. Overall online shopping on Thanksgiving rose 5.3%, according to Adobe Analytics, and while other early sales figures were promising, an air of caution was expressed by some shoppers who are mindful of overspending when inflation remains elevated and the labor market seems to be softening.

"The outlook for the consumer this holiday season is mixed," Ghriskey said. "Fed futures indicate a 25-basis-point cut on the Fed funds rate, but that percentage will bounce around between now and the Fed meeting. There's certainly some concern about the consumer and the economy."

The Dow Jones Industrial Average rose 278.31 points, or 0.59%, to 47,705.43, the S&P 500 gained 25.45 points, or 0.37%, to 6,838.06 and the Nasdaq Composite added 82.56 points, or 0.36%, to 23,297.70.

European shares reversed earlier losses and were last modestly higher as rising bets of a Fed rate cut and progress toward a Russia-Ukraine ceasefire buoyed sentiment.

MSCI's gauge of stocks across the globe rose 3.02 points, or 0.30%, to 1,003.72.

The pan-European STOXX 600 index rose 0.23%, while Europe's broad FTSEurofirst 300 index gained 5.58 points, or 0.24%.

Emerging market stocks fell 3.17 points, or 0.23%, to 1,367.22. MSCI's broadest index of Asia-Pacific shares outside Japan closed lower by 0.3%, to 703.50, while Japan's Nikkei rose 86.81 points, or 0.17%, to 50,253.91.

The dollar was heading for its worst weekly performance since late July on rising odds of further monetary easing from the Fed.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was essentially unchanged, with the euro down 0.03% at $1.1591.

Against the Japanese yen, the dollar strengthened 0.01% to 156.32.

In cryptocurrencies, bitcoin gained 1.11% to $92,417.72. Ethereum rose 1.14% to $3,068.57. U.S. Treasury yields advanced on a low-volume day.

The yield on benchmark U.S. 10-year notes rose 3.3 basis points to 4.031%, from 3.998% late on Wednesday.

The 30-year bond yield climbed 3.6 basis points to 4.6795% from 4.644% late on Wednesday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.3 basis points to 3.504%, from 3.481% late on Wednesday.

Oil prices were mixed as futures resumed trading after the CME outage. Investors kept an eye on protracted peace negotiations between Russia and Ukraine and looked ahead to the outcome of an OPEC+ meeting on Sunday for clues regarding potential output changes.

U.S. crude rose 0.95% to $59.21 a barrel and Brent fell to $63.29 per barrel, down 0.08%.

Gold prices were poised for a monthly gain on Fed rate cut optimism. Spot gold rose 0.99% to $4,198.09 an ounce. U.S. gold futures rose 0.8% to $4,198.50 an ounce.

(Reporting by Stephen Culp; Additional reporting by Amanda Cooper, Stella Qiu and Tom Westbrook Editing by Rod Nickel)