* Yields little changed as bonds end volatile year on quiet
* U.S. dollar set for fourth straight year of gains
* Oil prices down, but set for biggest yearly gain since
(Updates to U.S. trading, changes dateline; previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Dec 30 The dollar, oil and U.S. stocks
slipped on Friday in thin pre-holiday trading on the last
trading day of 2016, but were well on track to notch up sizable
gains for the year.
The dollar was on pace for a fourth straight year of gains
against a basket of major currencies, while oil prices were
headed for their best year since 2009.
Global markets have fared surprisingly well in a year marked
by major political shocks, including June's Brexit vote and the
unexpected election of Donald Trump as U.S. president in
On Friday, MSCI's world index, which tracks
shares in 46 countries, was little changed and on pace to finish
the year up 5.6 percent.
Strength in Asian and European shares helped the index, but
weakness on Wall Street weighed.
U.S. stocks slipped following weak economic data and a
decline in technology stocks.
After a spate of robust economic reports, the Chicago
Purchasing Manager Index fell more than expected to 54.6 in
"The market is ending 2016 with a whimper. We entered the
rally like a lion, but are leaving as a lamb," said Andre
Bakhos, managing director of Janlyn Capital in Bernardsville,
The S&P 500 technology sector fell 0.98 percent,
dragged down by weakness in the shares of Microsoft and
The Dow Jones Industrial Average was down 32.28
points, or 0.16 percent, to 19,787.5, the S&P 500 lost
7.88 points, or 0.35 percent, to 2,241.38 and the Nasdaq
Composite dropped 46.11 points, or 0.85 percent, to
Europe's broad FTSEurofirst 300 index closed up
0.24 percent at 1,428.4
The dollar index, which measures the greenback
against a basket of six major rivals, was set to gain 3.6
percent for the year, even as the euro briefly climbed by about
two full cents in overnight trading to $1.0651, its highest
since Dec. 14. The index was down 0.43 percent on Friday.
The dollar has rallied hard since the Nov. 8 U.S.
presidential election on expectations that President-elect
Donald Trump's plan to boost fiscal stimulus would benefit the
currency, even as doubts linger about how much dollar
appreciation a Trump White House will tolerate.
"Much depends on how the Trump presidency and the Chinese
economy work out," said Marshall Gittler, chief market analyst
for retail broker FX Primus.
"In general, I expect the dollar to continue to gain."
Oil prices were down for the day, but still on track for
their biggest annual gain in seven years after OPEC and other
major producers agreed to cut output to reduce a global supply
overhang that has depressed prices for two years.
Brent crude was down 0.47 percent at $56.58 a
barrel, while U.S. crude was down 0.33 percent at $53.59.
In bond markets, U.S. Treasuries were little changed across
the curve in thin pre-holiday trading. Treasuries ended the
fourth quarter with their poorest performance in the history of
the Merrill Lynch Treasury index, with a -4.175 percent return,
The sell-off during the year's final quarter was due largely
to Trump's election victory, analysts said, and the expectation
of looser fiscal policy and rising interest rates based on his
campaign promises of increased infrastructure spending and tax
Benchmark 10-year notes were down 9/32 in price
to yield 2.446 percent, little changed from 2.477 percent late
Spot gold prices were down 0.47 $1,152.83
(Reporting by Saqib Iqbal Ahmed; Additional reporting by Sam
Forgione in New York and Yashaswini Swamynathan in Bengaluru)