* Dollar index to post strongest week since April
* Oil heading for weekly drop on virus-linked demand concerns
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh (Updates prices; changes comment and dateline, previous LONDON)
By Rodrigo Campos
NEW YORK, Sept 25 (Reuters) - Stocks were set to fall by the most for any week since June and the dollar was on track for its strongest week since April as concern over the economic effect of a second wave of virus-related lockdowns continued to weigh on investors' risk appetite.
But tech stocks led the way higher on Wall Street on Friday, as they have of late on days governed by worries over the economic recovery. The gains offset losses elsewhere, and an index of major stock markets globally was up on the day.
Other than COVID-19 angst, the week was dominated by speculation over the likelihood of another stimulus package to support the American economy.
"There's evidence of a slowdown in the United States, which we think is temporary, but it would be reinforced if there is no additional fiscal package," said Sebastien Galy, senior macro strategist at Nordea Asset Management.
Bets on more stimulus increased after squabbling U.S. political parties talked about another super-sized stimulus package but the rise in the dollar =USD and demand for safe-haven government bonds remained telling. GVD/EUR
On Wall Street, the Dow Jones Industrial Average .DJI rose 29.95 points, or 0.11%, to 26,845.39, the S&P 500 .SPX gained 10.69 points, or 0.33%, to 3,257.28 and the Nasdaq Composite .IXIC added 90.38 points, or 0.85%, to 10,762.65.
The S&P was on track for four consecutive weekly losses, the longest such streak in over a year.
The pan-European STOXX 600 index .STOXX lost 0.10% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.20%. The global index was down about 3% for the week, the most for any week since mid June.
Emerging market stocks lost 0.25%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.23% higher, while Japan's Nikkei .N225 rose 0.51% to end a three-day week.
Treasury yields remained little changed in a week where the 10-year traded in a 5-basis-points range.
"Overall the market remains fairly range-bound. There is some intraday, intra-week volatility that when you really look at it, we just don't go anywhere," said Justin Lederer, an interest rate strategist at Cantor Fitzgerald.
But the relapse in sentiment has hit emerging market debt, especially countries with weak credit ratings. Argentina's newly restructured bonds have lost around 25%, making it the worst return to markets since Greece in 2012 while plenty of other countries have seen 10% slides. EMRG/FRX
China's government bonds gained acceptance into one of the world's most coveted bond benchmarks, the FTSE Russell WGBI. CGBs will be introduced late next year. the currency markets, the dollar index rose for the fourth time this week and was set for its strongest weekly showing since April.
The dollar index =USD rose 0.408% on Friday, with the euro EUR= down 0.45% to $1.1619.
The Japanese yen weakened 0.19% versus the greenback at 105.60 per dollar, while Sterling GBP= was last trading at $1.2703, down 0.36% on the day.
Demand for the greenback was boosted in part by Washington's failure to create a stimulus package and concerns ahead of the U.S. election according to Juan Perez, senior currency trader and strategist at Tempus Inc.
"In times like that the chaos and havoc and blurriness of the future is so intense and so dense, that's when the dollar is going to rise once again," said Perez.
Top Republicans on Thursday repudiated Donald Trump's refusal to commit to a peaceful transfer of power. dollar's strength this week has also battered commodities, with gold set for its biggest weekly drop since March. On Friday, spot gold XAU= dropped 0.4% to $1,860.10 an ounce. GOL/
Silver tumbled 14% this week so far, a drop not seen in over six months. The spot price XAG= fell 1.50% to $22.86 on the day.
Oil prices fell and were set for a weekly decline mostly due to mounting worries about the impact on fuel demand of a widespread resurgence in coronavirus infections. O/R
U.S. crude CLc1 recently fell 0.92% to $39.94 per barrel and Brent LCOc1 was at $41.63, down 0.74% on the day.
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http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
http://tmsnrt.rs/2egbfVh Emerging markets
http://tmsnrt.rs/2ihRugV MSCI World over the years
https://tmsnrt.rs/2EwZNCR EM FX feels the pain
https://tmsnrt.rs/33ZOY4Y
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