* S&P 500, Nasdaq, Dow on course for yearly gains
* U.S. crude prices post 20.5% drop in 2020
* Dollar set for worst year since 2017
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh (Updates to late afternoon)
By Stephen Culp
NEW YORK, Dec 31 (Reuters) - The S&P 500 reversed course and turned positive on Thursday and the dollar advanced as investors prepared to close the book on a turbulent year of pandemic, recession and recovery.
The Dow joined the S&P in the green but the Nasdaq remained in negative territory, and were on track to exit 2020 like a lamb, much the way they entered it. But in the intervening months, they both roared and plummeted as economic shutdowns to contain the coronavirus brought markets to their knees.
The indexes are on course to end the year on a high note. Equities bounced back with a vengeance following the plunge in March, and the Nasdaq, S&P 500 and Dow are set to show respective annual gains of around 43%, 16% and 7%.
"It's a quiet day with little news and low volume - an ironic end to such a tumultuous year," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "All eyes are on next year, which will be 'show me' time, with investors watching to see if actual fundamentals will be as strong as current stock prices are forecasting."
"It's been a surprising year because we've come so far so fast despite conditions that are currently weak, and the recovery has spread across almost all regions and asset classes," Carter added. "Investors must be grateful that equity markets are up double digits this year, considering where we were when COVID hit in March."
Initial jobless claims USJOB=ECI unexpectedly dropped for the second straight week, according to the Labor Department, but remain elevated, suggesting layoffs remain stubbornly high as the economy stumbles through a COVID-19 resurgence. Donald Trump was expected to fly back to Washington on Thursday, cutting his New Year's Eve festivities short to pick up his fight with Congress over a defense bill and stimulus checks. around the world struggled to deploy vaccines to end the global health crisis. About 2.8 million Americans have been inoculated so far, falling well short of the year-end goal of 20 million. deaths from COVID-19 https://apac1.apps.cp.thomsonreuters.com/cms/?navid=1592404098 have surpassed 1.8 million. In the United States, more than 340,000 have died from the disease.
The Dow Jones Industrial Average .DJI rose 89.22 points, or 0.29%, to 30,498.78, the S&P 500 .SPX gained 10.29 points, or 0.28%, to 3,742.33 and the Nasdaq Composite .IXIC dropped 5.42 points, or 0.04%, to 12,864.58.
European stocks ended the session lower as tighter coronavirus restrictions in the UK and higher U.S. tariffs on some EU products dampened optimism on Britain's last day as a member of one of the world's largest trading blocs. pan-European STOXX 600 index .STOXX lost 0.30% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.05%.
Emerging market stocks rose 0.14%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.01% lower, while Japan's Nikkei .N225 lost 0.45%.
Oil prices advanced on hopes of rebounding demand, but U.S. and Brent crude prices ended 2020 down 20.5%, and 21.5%, respectively. crude CLcv1 rose 0.25% to settle at $48.52 per barrel and Brent LCOcv1 settled at $51.80 per barrel, up 0.33% on the day.
U.S. Treasury yields dipped on the last trading day of the year, pulling the yield curve flatter, as thin volume exaggerated market moves. 10-year notes US10YT=RR last rose 3/32 in price to yield 0.9165%, from 0.926% late on Wednesday.
The 30-year bond US30YT=RR last rose 12/32 in price to yield 1.6462%, from 1.662% late on Wednesday.
The dollar rose against a basket of world currencies, but was still on track for its worst year since 2017 as expectations for further fiscal aid and easy monetary policy from the U.S Federal Reserve prompted investors to shun the greenback. dollar index .DXY rose 0.29%, with the euro EUR= down 0.62% to $1.2219.
The Japanese yen weakened 0.06% versus the greenback at 103.26 per dollar, while sterling GBP= was last trading at $1.367, up 0.35% on the day.
Gold prices inched lower against the greenback's advance, but the safe-haven metal was set to notch its best year in a decade due to economic uncertainties caused by the pandemic. gold XAU= added 0.1% to $1,895.25 an ounce.
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