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GLOBAL MARKETS-Stocks, bond yields rise ahead of Trump inauguration

Published 2017-01-20, 10:47 a/m
© Reuters.  GLOBAL MARKETS-Stocks, bond yields rise ahead of Trump inauguration
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* Dollar and Wall Street rise but S&P set for weekly dip

* Gold falls but set for 4th week of gains

* Officials in Washington D.C. prepare for massive protests (Updates to U.S. market open, changes byline, previous dateline LONDON)

By Sinead Carew

NEW YORK, Jan 20 (Reuters) - U.S. stocks rose along with Treasury yields on Friday, the last day of a choppy trading week, as investors awaited Donald Trump's Presidential inauguration later in the day.

The dollar, which has lost some of its momentum in recent weeks, was off 0.03 percent against six major currencies .DXY .

There has been a pause in the post-election market rally in risky assets such as equities amid questions over how Trump's administration will carry out ambitious campaign promises of lower taxes, more government spending and looser regulations.

The MSCI all world stock index .MIWD00000PUS was up modestly by 0.38 percent but was poised for a weekly decline.

Caution ahead of the former reality TV star's impending inauguration speech offset better-than-expected economic data from China and comments from Federal Reserve Chair Janet Yellen, in which she sounded less hawkish than the previous day.

"All eyes will be on the content and style of Trump's inauguration speech," Morgan Stanley (NYSE:MS) strategists led by Hans Redeker wrote in a note.

"The more 'presidential' this speech comes across, the better the outcome for markets," the strategists wrote.

Tens of thousands of law enforcement officers and miles of barriers were in place in Washington D.C. as it braced for hundreds of thousands of people planning to celebrate or protest the inauguration of Trump. 10:39 a.m. ET, the Dow Jones Industrial Average .DJI was up 88.02 points, or 0.45 percent, at 19,820.42, the S&P 500 .SPX gained 9.9 points, or 0.44 percent, to 2,273.59 and the Nasdaq Composite .IXIC added 22.83 points, or 0.41 percent, to 5,562.91.

The benchmark S&P 500 was on track to end the week down slightly, and both the Dow and Nasdaq were each set for weekly declines.

The S&P 500 .SPX has fallen a median 2.7 percent in the month after each new president has taken the keys to the White House since Herbert Hoover did so in January 1929, according to Reuters analysis.

Benchmark 10-year notes US10YT=RR fell 7/32 in price to yield 2.48 percent, up from 2.46 percent late on Thursday and a low of 2.31 percent on Tuesday. New Treasury supply to finance an expected bump up in government spending may drag further on bond prices and send yields higher. believe that what you are going to see down the road is more supply by this administration, whether it's a 50-year bond or just more supply to finance what they want to do in infrastructure and how they want to move the economy along," said Tom di Galoma, managing director at Seaport Global in New York.

European stocks .STOXX were little changed, up a tad by 0.16 percent, reversing earlier losses amid caution ahead of Trump's inauguration. However, Europe's benchmark index was poised for its worst week since early December.

Precious metals funds saw their first inflows in 10 weeks, according to data from fund tracker EPFR and Bank of America-Merrill Lynch while money was pulled from funds focused on financials stocks and high-yield bonds.

Spot gold XAU= , on track for a fourth straight week of gains, fell 0.04 percent on Friday to $1,204.3 per ounce.

Oil prices rose for the second day in a row on expectations a weekend meeting of the world's top oil producers would demonstrate compliance to a global output cut deal. O/R

Brent crude LCOc1 , the international benchmark, rose 2 percent to $55.30. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were trading up 2.3 percent at $52.57 per barrel.

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