* U.S. stocks struggle higher but pressured
* European shares sag in choppy month-end trade
* Yen and euro rise vs dollar
NEW YORK, Nov 26 (Reuters) - Stocks around the globe were under pressure and the dollar slipped on Tuesday amid renewed political tensions in the East China Sea.
U.S. stocks ended little changed during a holiday-abbreviated week as investors found few incentives to extend a rally that has repeatedly taken indexes to record peaks, though a proposed acquisition prompted some risk appetite for equities.
Permits for U.S. home construction rose to the highest level in nearly 5-1/2 years in October, suggesting the housing market recovery remained intact despite recent signs of slowing.
"It is a market that is on data watch as the Fed is clearly on data watch," said Quincy Krosby, market strategist with Newark, New Jersey-based Prudential Financial, which has $1 billion in assets under management. "Permits were very, very good and it will translate into more jobs."
The Dow Jones industrial average closed up 0.26 point, or 0.00 percent, at 16,072.80. The Standard & Poor's 500 Index was up 0.27 point, or 0.01 percent, at 1,802.75. The Nasdaq Composite Index was up 23.18 points, or 0.58 percent, at 4,017.75.
The big acquisition news was Men's Wearhouse Inc striking back at Jos. A. Bank Clothiers Inc with a $1.5 billion bid to acquire its smaller rival, only weeks after the suit and tuxedo retailer rejected a takeover offer from Bank.
After mixed performances in Asia, the pan-European FTSEurofirst 300 share index struggled and ended down 0.6 percent as the approaching month-end added to a general mood of caution.
Still, with the U.S. Thanksgiving holiday on Thursday, investor appetite for fresh bold moves has mostly been lacking.
An escalation of political tensions in parts of Asia was also in focus and helped keep gold near a one-week high, though a softer dollar left it vulnerable.
The White House has called China's demands that airlines inform Beijing when flying over disputed islands in the East China Sea "unnecessarily inflammatory."
Two unarmed U.S. B-52 bombers on a training mission flew over disputed islands in the East China Sea without informing Beijing, Pentagon officials said on Tuesday..
Thailand was also in the spotlight as anti-government protesters stepped up their bid to oust Prime Minister Yingluck Shinawatra, amid talk that the central bank had intervened in the currency market, with the baht bouncing from an 11-week low.
The China tensions kept the dollar under pressure after disappointing housing data pushed it - and U.S. government bond yields-- lower on Monday.
The dollar index, which measures the greenback against six major currencies, was down 0.4 percent at 80.61, well off last week's high of 81.29.
The euro climbed 0.4 percent against the U.S. currency, while the dollar fell 0.4 percent against the yen .
The dollar extended losses against the euro and yen after data showed the U.S. consumer confidence index fell in November. .
"The big drop seen in U.S. confidence in October spilled over into November, with consumers seeing the effects of the government shutdown lingering for the foreseeable future," said Christopher Vecchio, currency analyst at DailyFX.
The recent view of the Fed was that the central bank will wait a while longer before attempting to scale back its huge stimulus program, which has long been fueling the rally in global stocks.
Yields on U.S. Treasuries fell overnight, and euro zone government bonds followed suit as investors kept a close eye on the ECB for any signs it is contemplating more easing. The benchmark 10-year U.S. Treasury note was up 9/32, the yield at 2.7168 percent.
Tokyo's Nikkei benchmark, as usual, bore the negative effects of the stronger yen as it shed 103 points, though it remained well within reach of a 5-1/2 year peak reached in May.
After being up for most of the day, Brent crude fell 14 cents to $110.86, but the momentum remained favorable as investors concluded a deal between Iran and world powers on its nuclear program would bring no immediate increase in supplies and Libyan oil workers went on strike in Benghazi.
The nuclear deal, reached in Geneva on Sunday, halts Iran's most sensitive nuclear activity and suspends some sanctions by the West, but caps Iran's exports at the current level of about 1 million barrels per day (bpd).
"My sense is that the promise of Iranian oil doesn't really offset a lack of oil from Libya," said Phil Flynn, an energy analyst with the Price Futures Group in Chicago.
Libyan oil workers, civil servants and private sector staff went on strike in the port city of Benghazi to protest deteriorating security a day after deadly clashes there between the army and Islamist militants..