By Riva Gold and Corrie Driebusch
U.S. stocks, bonds and the dollar were relatively calm at the end of a week when the Federal Reserve's latest signals on interest rates rippled around the world.
The Dow Jones Industrial Average was little changed Friday and on track for its sixth weekly gain in a row, with the blue-chip index rising 8.3% from Election Day through Thursday's close.
The rally lost some steam after the Federal Reserve raised interest rates for the first time in a year Wednesday and signaled a quicker-than-expected pace of rate rises in 2017.
The Dow Jones Industrial Average rose less than 1 point, or less than 0.1%, to 19853 Friday, on pace for a weekly gain of 0.5%. The S&P 500 lost 0.2% and the Nasdaq Composite was down 0.3%, and both were basically flat on the week.
The Fed's decision also accelerated a shift into the dollar and out of U.S. Treasurys and gold, but that eased Friday. Some questioned whether the moves earlier in the week were overdone, given that the Fed's projections for rate increases have sometimes differed from eventual decisions on monetary policy.
The yield on the 10-year U.S. Treasury note was at 2.582%, according to Tradeweb, compared with 2.58% on Thursday, its highest yield in more than two years. Yields move inversely to prices.
Gold clawed back some ground after settling at its lowest level since February on Thursday, and was recently up 0.6% at $1,136.60 an ounce. U.S.-traded crude oil was up 1.8% at $51.79 a barrel after two days of declines.
The WSJ Dollar Index, which tracks the currency against 16 others, fell 0.1% after gaining 2% over the previous three sessions.
Many investors have been concerned about the rapid appreciation of the dollar, which could hamper a widely expected U.S. earnings recovery and make it more difficult to pay back the trillions in dollar-denominated debt around the world.
"Stocks are hovering around highs, but it feels like we're on a bit of a tightrope at the moment," said Mitul Patel, head of interest rates at Henderson Global Investors.
For the stock market to perform well, "you need growth to be good and inflation to be OK, but you need the Fed not to sound too hawkish," he said. "If the Fed or the data disappoint, it could come under pressure."
Postelection gains have helped put the Dow industrials up around 14% for the year.
Analysts and investors said the recent rally was notable for the emergence of new market leaders -- financial companies and industrial companies -- but also for a shift in enthusiasm for stocks.
"What's extraordinary is the amazing change in sentiment since the election," said Michael LaBella, portfolio manager for QS Investors. "Everybody hated" the rally of the last nearly eight years, he said, while in the past month there is more eagerness to own U.S. stocks.
It is even more pronounced compared with sentiment at the start of 2016, when worries about an economic recession abounded, he said.
In February, major stock indexes in the U.S. and Europe were down double-digit percentages for the year. The Stoxx Europe 600 rose 0.3% Friday to its highest close of the year.
Earlier, Japanese stocks touched a 2016 high, led by the financial sector, with the Nikkei Stock Average closing out its sixth straight week of gains.
Write to Riva Gold at email@example.com and Corrie Driebusch at firstname.lastname@example.org
(END) Dow Jones Newswires
December 16, 2016 14:46 ET (19:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.