NEW YORK (Reuters) - Stocks on major bourses posted their best weekly gains since November on Friday, helped by corporate earnings reports and remarks by Federal Reserve officials calming investor fears about U.S. monetary policy.
On Wall Street, the Dow and S&P 500 hit all-time closing highs for a second day, and the S&P 500 rose for a seventh straight day, matching a winning streak from March. The index climbed 3 percent for the week, its best weekly percentage gain since early January.
Stocks, bond prices and commodities have rallied this week while the dollar tumbled on hints from Federal Reserve chief Ben Bernanke that the U.S. central bank was unlikely to phase out its stimulative bond buying before the U.S. unemployment rate improved further.
"The momentum has been incredibly strong ... At some point, a breather or some sort of consolidation makes sense," said Joe Bell, senior equity strategist at Schaeffer's Investment Research in Cincinnati.
The MSCI world index .MIWD00000PUS was up 0.1 percent for the day and 3.4 percent for the week, its best weekly percentage gain since November, while the broad FTSEurofirst 300 .FTEU3 ended down 0.1 percent.
The Dow Jones industrial average .DJI ended up 3.38 points, or 0.02 percent, at 15,464.30. The Standard & Poor's 500 Index .SPX was up 5.17 points, or 0.31 percent, at 1,680.19. The Nasdaq Composite Index .IXIC was up 21.78 points, or 0.61 percent, at 3,600.08.
Stronger-than-expected results from top U.S. banks JPMorgan Chase (JPM.N) and Wells Fargo (WFC.N) helped boost the market, while shares of United Parcel Service Inc. (UPS.N) dragged on the S&P 500 after a disappointing outlook. UPS, the world's biggest package delivery company, and smaller rival FedEX (FDX.N) are considered economic bellwethers because of the high volume of goods they move around the world.
Boeing (BA.N) shares, also a drag, fell 4.7 percent to $101.87 after a Dreamliner operated by Ethiopian Airlines caught fire at Britain's Heathrow airport on Friday.
Investors were nervous about holding onto positions ahead of the release of Chinese second-quarter economic growth data, due before European markets open on Monday, which will be particularly important to the mining sector.
After a week of swings in the world's big currencies, foreign exchange markets traded more calmly.
The dollar index .DXY, which measures the greenback's performance against a basket of major currencies, was up 0.2 percent. It was down 1.8 percent for the week, its worst decline since early June.
"There is some argument for suggesting that the shock effect of a dovish Bernanke has largely been digested," said Alan Ruskin, global head of foreign exchange strategy at Deutsche Bank in New York.
"Even if he tries to avoid changing his tone, any policy surprises are more likely to be in a positive dollar direction than the reverse," he said.
U.S. Treasuries prices slipped on profit-taking and pre-weekend position-squaring. Benchmark 10-year Treasury notes were unchanged in late trade, yielding 2.59 percent. Earlier, they were up as much as 15/32, with a yield of 2.518 percent.
GOLD EASES, OIL CLIMBS
Gold eased for the day but notched its biggest weekly advance in nearly two years.
Analysts said, however, that recent gains in U.S. equities amid some positive signs for the economy and no indications of abatement in outflows from gold-backed exchange-traded funds could pressure the metal.
"The fact that the leading U.S. equity indices closed at record highs yesterday - which could prompt investors to switch once again from gold ETFs to equities - is problematic for gold," said Eugen Weinberg, head of commodity research at Commerzbank.
Many commodity markets have had a strong run this week as talk of continued central bank support has bolstered hopes of a pickup in global growth.
Oil prices ended with sharp gains for the day, led by the biggest surge in gasoline futures this year as a string of refinery outages stoked concerns about fuel supplies.
Brent climbed $1.08 to settle at $108.81 while U.S. crude oil rose $1.04 to settle at $105.95 a barrel.
Portuguese government bonds fell again after Lisbon requested a delay in the next review of a bailout program due to the country's political crisis.
Tensions were reignited this week after Portugal's president threw out plans that seemed to have patched up a government rift and instead demanded some kind of grand coalition, which would include opposition Socialists, who have been calling for snap elections.
Asset returns in 2013: link.reuters.com/dub25t
Currencies v dollar in 2013: link.reuters.com/tak27s
(Additional reporting by Marc Jones in London and Alison Griswold, Anna Louie Sussman and Julie Haviv in New York; Editing by Chizu Nomiyama, Bernadette Baum, Leslie Adler James Dalgleish and Dan Grebler)
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