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NEW YORK (Reuters) - Global equity prices shrugged off weakness on Wall Street to cling to gains after hitting their highest level since mid-2015 on Thursday, bolstered by strong Chinese data that added to optimism about global growth and inflation.
The dollar slipped against a basket of major currencies after U.S. inflation and unemployment data failed to reverse a downtrend that followed some of the biggest gains on record for China's yuan. U.S. Treasury debt yields slipped as investors grew risk-averse amid uncertainty about the incoming Trump administration.
MSCI's world index .MIWD00000PUS, which tracks shares in 46 countries, rose 0.55 percent for a third straight day of gains.
The index has been riding a wave of upbeat factory and service sector surveys out of the United States, Europe and Asia this week.
Growth in China's services sector accelerated to a 17-month high in December, a private sector survey showed.
The index, however, got little support from Wall Street as the S&P 500 closed slightly lower, weighed by financial shares and as investors dumped traditional retailers Macy's (M.N) and Kohl's (KSS.N) on dismal holiday sales numbers.
Amazon (AMZN.O) powered the Nasdaq Composite to a record closing high.
"Financials coming down probably had something to do with bond yields coming down. A lot of the post-election rally was predicated on yields moving higher," said Jimmy Chang, chief investment strategist at Rockefeller & Co.
Adding to the downbeat sentiment was a report by a payrolls processor which showed that U.S. private employers added fewer jobs than expected in December even as the U.S. labor market remained solid.
Thursday's ADP report precedes Friday's nonfarm payrolls data, which includes hiring in both private and public sectors.
"Overall it looks like investors will be in a wait-and-see mode ahead of the Labor Department report tomorrow," said Aaron Clark, portfolio manager at GW&K Investment Management.
The Dow Jones Industrial Average .DJI fell 42.87 points, or 0.21 percent, to close at 19,899.29, the S&P 500 .SPX lost 1.75 points, or 0.08 percent, to finish at 2,269 and the Nasdaq Composite .IXIC added 10.93 points, or 0.2 percent, to finish at 5,487.94.
Europe's broad FTSEurofirst 300 index .FTEU3 closed up 0.12 percent at 1,445.57.
U.S. Treasury debt yields dropped broadly, falling for a third straight session.
Yields should rise again despite weakness early in the year, although for the next few weeks they likely will be range-bound as investors wait to see results from the incoming Trump administration, said Justin Lederer, interest rate strategist at Cantor Fitzgerald in New York.
"There's a lot of uncertainty until the next administration takes place," Lederer said. "We'll be in ranges until we know more about the Trump presidency."
Buying in Treasuries also accelerated after the disappointing private sector payrolls data.
The U.S. 10-year note US10YT=RR was up 29/32 in price to yield 2.348 percent, compared with 2.452 percent late on Wednesday.
The dollar slipped to a three-week low against a basket of currencies. China stepped into both its onshore and offshore yuan markets to shore up the faltering yuan, sparking speculation that it wants a firm grip on the currency ahead of Donald Trump's inauguration on Jan. 20.
The dollar index .DXY, which measures the greenback against a basket of six major rivals, was down 1.26 percent to 101.41.
The dollar's retreat helped push gold to its highest in a month. Spot gold XAU= rose 1.43 percent to $1,180.01 an ounce.
Oil prices rose in a choppy session, lifted by news that Saudi Arabia had cut production to meet OPEC's agreement to cut output. Prices had fallen earlier on data showing a surprisingly large increase in U.S. gasoline and distillate inventories.
Brent crude LCOc1 settled up 43 cents, or 0.76 percent, at $56.89 a barrel, and U.S. crude CLc1 settled up 50 cents, or 0.94 percent, at $53.76.
Reporting by Saqib Iqbal Ahmed; Additional reporting by Dion Rabouin, Gertrude Chavez-Dreyfuss and Sinead Carew in New York; Editing by Nick Zieminski and James Dalgleish