(Updates to U.S. market close)
By Stephen Culp
NEW YORK, April 9 (Reuters) - The S&P 500 and the Dow notched record closing highs on Friday after solid U.S. inflation data and an uptick in Treasury yields suggested the economic recovery from the pandemic-related recession was gaining momentum.
"(It was) a fairly quiet Friday with low volume, a welcome change from 12 months ago," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
"Today was all about inflation," Carter added. "Despite today's higher PPI number, equity markets are starting to begrudgingly believe the Fed is in no rush to raise interest rates."
All three major U.S. stock indexes posted weekly gains as upbeat economic data boosted risk appetite ahead of first-quarter earnings.
Transports, seen as a proxy for economic health, advanced for their 10th week in a row.
"Cyclical parts of the market like transports are being driven higher due to strong vaccination rates in the U.S., which suggests the economic reopening may accelerate," Carter said.
A Labor Department report showed producer prices rose last month at twice the speed of February's growth, reviving some inflation worries.
U.S. Federal Reserve Chairman Jerome Powell offered assurances on Thursday that the central bank is far more concerned about the recent uptick in COVID-19 infections than inflationary pressures. is not overly concerned about long-term inflation," said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina. "The Fed has stressed from the very beginning these increases will be transitory."
The Dow Jones Industrial Average .DJI rose 297.03 points, or 0.89%, to 33,800.6, the S&P 500 .SPX gained 31.63 points, or 0.77%, to 4,128.8 and the Nasdaq Composite .IXIC added 70.88 points, or 0.51%, to 13,900.19.
European stocks ended nominally higher, but marked their longest winning streak since November 2019 on rising hopes of a rapid economic rebound. pan-European STOXX 600 index .STOXX rose 0.08% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.32%.
Emerging market stocks lost 0.97%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.81% lower, while Japan's Nikkei .N225 rose 0.20%.
U.S. Treasury yields rose in the wake of the PPI report, which provided further evidence that the world's largest economy was on a stable road to recovery from the pandemic. 10-year notes US10YT=RR last fell 7/32 in price to yield 1.655%, from 1.632% late on Thursday.
The 30-year bond US30YT=RR last fell 3/32 in price to yield 2.327%, from 2.322% late on Thursday.
The dollar inched higher against a basket of world currencies as inflation data lifted bond yields, but the greenback had its softest week of the year due to better-than-expected economic data and the dovish Fed. dollar index .DXY rose 0.11%, with the euro EUR= down 0.07% to $1.1904.
The Japanese yen weakened 0.35% versus the greenback at 109.65 per dollar, while Sterling GBP= was last trading at $1.3709, down 0.17% on the day.
Crude oil prices dropped on rising supply amid a mixed picture on demand recovery from the COVID-19 slump. crude CLcv1 dipped 0.47% to settle at $59.32 per barrel, while Brent crude LCOc1 settled at $62.95 per barrel, falling 0.4% on the day.
Gold withdrew from Thursday's one-month peak, weighed down by a rebounding dollar and rising Treasury yields. Still, the safe-haven metal appears headed for its first weekly gain in three. gold XAU= dropped 0.8% to $1,742.64 an ounce.
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http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
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http://tmsnrt.rs/2ihRugV MSCI All Country World Index Market Cap
http://tmsnrt.rs/2EmTD6j Dollar set for worst week of the year
https://tmsnrt.rs/3mvEAdU
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