* U.S. 10-yr yield hits 13-month high
* Gold little changed, bitcoin dips
* Crude slips after two strong weekly gains
(New throughout, updates prices, market activity and comments
to after U.S. stock market close)
By Rodrigo Campos
NEW YORK, March 12 (Reuters) - An index of stocks across the
world dipped on Friday but still posted its strongest weekly
gain in five, while benchmark U.S. Treasury yields climbed to
13-month highs, partly on optimism after a $1.9 trillion
recovery package was signed into law.
On Wall Street, the S&P 500 drifted higher to end up 0.1% on
the day and 2.6% for the week, its strongest weekly showing
since early February. The Nasdaq underperformed as the rotation
from growth to value continued. The Dow Industrials hit an
intraday record high every day this week.
The Friday spike in Treasury yields supported the dollar,
which closed the week down 0.3% against a basket of currency
peers =USD , the biggest drop in four weeks.
With U.S. stimulus coming and vaccine rollouts reopening
economies against a backdrop of super-loose monetary policy,
some analysts expect inflation to pick up. "We are back to the idea that more growth is more inflation
and investors are a little nervous about current yield levels
which is affecting tech stocks," said Victoria Fernandez, chief
market strategist at Crossmark Global Investments in Houston.
"It's all about the pace in which yields grow and the market
seems to be comfortable with another 10-20 basis points jump in
the benchmark yield if backed up by strong data that shows
economic recovery."
The Dow Jones Industrial Average .DJI rose 293.05 points,
or 0.9%, to 32,778.64, the S&P 500 .SPX gained 4 points, or
0.10%, to 3,943.34 and the Nasdaq Composite .IXIC dropped
78.81 points, or 0.59%, to 13,319.87.
The Dow had its biggest week so far this year with a 4.1%
advance and the Nasdaq posted its first positive week in four,
up 3.1%.
The pan-European STOXX 600 index .STOXX lost 0.26% on
Friday and MSCI's gauge of stocks across the globe
.MIWD00000PUS shed 0.06%.
Emerging market stocks lost 0.69%. Overnight, MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS closed 0.64% lower, while Japan's Nikkei .N225
rose 1.73%.
U.S. 10-year Treasury yields US10YT=RR rose above 1.6% and
posted their seventh consecutive weekly rise.
"The bias in rates is still higher barring an unforeseen
setback on the vaccines or explicit Fed action," said Gregory
Faranello, head of U.S. rates at AmeriVet Securities in New
York.
U.S. data showed producer prices posted in February their
largest annual gain in nearly 2-1/2 years, but the currently
high unemployment rate could make it harder for businesses to
pass on the higher costs to consumers. Benchmark 10-year notes US10YT=RR last fell 28/32 in price
to yield 1.6247%, from 1.527% late on Thursday.
The recent, sharp, market moves give even more importance to
next week's meeting of the U.S. Federal Reserve for clues to its
views on rising yields and the threat of inflation.
In currency markets, the dollar index =USD rose 0.243%,
with the euro EUR= down 0.27% to $1.1952.
The Japanese yen weakened 0.49% versus the greenback at
109.04 per dollar, while Sterling GBP= was last trading at
$1.3924, down 0.47% on the day.
Markets are likely to remain volatile in the second quarter,
particularly for the dollar, which was much stronger than
expected at the start of the year, said Cliff Zhao, chief
strategist at China Construction Bank International.
"The strong U.S. dollar may weigh on some liquidity
conditions in the emerging markets," he said.
The Institute of International Finance on Thursday urged the
Fed to give guidance on its managing of higher yields to avoid
even more outflows from emerging markets.
Oil prices fell, with both Brent and WTI down slightly for
the week after rising more than 10% over the past two.
On Friday, U.S. crude CLc1 fell 0.67% to $65.58 per barrel
and Brent LCOc1 was at $69.20, down 0.62% on the day.
Spot gold XAU= added 0.1% to $1,723.75 an ounce. Silver
XAG= fell 0.82% to $25.86.
Bitcoin BTC=BTSP last fell 1.92% to $56,661.44.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
Fund flows into U.S. based growth and value funds https://tmsnrt.rs/3rKmhn2
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