By David Gaffen
NEW YORK (Reuters) - Major global equity markets were little changed on Friday while gold rose to near a two-month high as the dollar softened on reduced expectations for U.S. economic growth.
Wall Street was modestly weaker but activity was muted. A survey of U.S. consumer sentiment came in a bit above expectations, but it was not enough to motivate buying with the S&P 500 not far from a record high. The benchmark index is on track for its second weekly loss in the last three weeks.
Concerns about U.S. growth as a result of weaker-than-expected data on consumer spending and a downward revision to first-quarter GDP has boosted the bond market this week. Long-dated 10-year and 30-year yields were lower on Friday, hovering near three-week lows.
"The market is not accepting the higher growth trajectory that the Fed and blue chip economists are telling us we will see in the second half," said Vishal Khanduja, portfolio manager for Calvert Investments.
The 10-year benchmark yield was 2.517 percent, after hitting a low of 2.507 percent earlier in the day. The steady interest in fixed income from pension funds and other investors has helped keep interest rates low - which has helped equities remain stable even as few catalysts emerged to fuel more buying in stocks.
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The Dow Jones industrial average fell 25.34 points or 0.15 percent, to 16,820.79, the S&P 500 lost 0.73 points or 0.04 percent, to 1,956.49 and the Nasdaq Composite added 5.76 points or 0.13 percent, to 4,384.81.
Gold was closing in on a fourth straight weekly gain at $1,315 an ounce, as geopolitical unrest in Iraq and Ukraine boosted its appeal and the soft U.S. data weakened the dollar. [FRX/]
Spot gold was up $1.65 to $1,319.25 an ounce. On Tuesday this week it hit $1,325.90, highest since mid-April. It was up 0.3 percent on the week.
Geopolitical concerns and subdued economic data were also partially responsible for the lackluster enthusiasm in risk assets this week.
Fighting between Iraqi forces and insurgents raged in the hometown of the late dictator Saddam Hussein and Russia warned of "grave consequences" as Ukraine signed a trade and political agreement with the European Union.
Oil, usually the most sensitive to Middle East unrest, was little changed on Friday. Brent crude fell 9 cents to $113.12 and was on track for its biggest weekly drop in a month, since the fighting in Iraq has not yet spread to the south where most of the country's oil is produced. [O/R]
At $113 a barrel, prices have dropped nearly $3 from a nine-month high of $115.71 hit on June 19. "The exaggerated fear premium is being priced out," said Carsten Fritsch, a senior oil and commodities analyst at Commerzbank in Frankfurt.
The U.S. dollar index stuck tight to one-month lows reached on Wednesday, falling to 80.086. The dollar also hovered around a five-week low of 101.37 yen.
(Reporting by David Gaffen in New York and Marc Jones in London; Editing by Chizu Nomiyama)