* S&P 500 touches new intraday high
* Dollar turns up on rising U.S. bond yields
* Oil at near nine-month highs (Adds New York stock, dollar gains; changes dateline; previous LONDON)
By Michael Connor
NEW YORK, June 20 (Reuters) - Wall Street and European equities traded at new highs on Friday while oil prices neared nine-month peaks, spurred by violence in Iraq.
U.S. Treasuries’ prices softened in early trading following a weak sale of inflation-linked bonds, and the dollar rose as American bond yields increased.
The Standard & Poor’s 500 index of top companies hit a third straight intraday high for its sixth day of gains, on course for its longest winning streak since mid-April.
The Dow Jones industrial average rose 50.02 points, or 0.30 percent, at 16,971.48. The Standard & Poor’s 500 Index was up 4.28 points, or 0.22 percent, at 1,963.76. The Nasdaq Composite Index was up 5.47 points, or 0.13 percent, at 4,364.80.
“There continues to be this hope that the economy improves, that growth improves. But for the markets, a slow steady growth environment is pretty much nirvana,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
Buoyed by the billions of dollars the U.S. Federal Reserve is still pumping into the global economy, equity markets took heart from a sanguine message this week on inflation from Fed chief Janet Yellen.
That effect was still dominant on Friday. All of Europe’s major exchanges inched up, although the MSCI index of world shares dipped 0.04 percent from record highs reached on Thursday.
The pan-European FTSEurofirst 300 index was up 0.15 percent and reached a 6 1/2-year high as drugmaker Shire rallied on a takeover offer, putting the index on track for a 10th straight week of gains.
U.S. Treasuries’ yields rose in part on follow-through from Thursday’s weak sale of 30-year Treasury Inflation-Protected Securities. Traders also repositioned as they adjusted expectations of when the Fed will begin raising interest rates.
The Fed on Wednesday played down a recent uptick in inflation, which has hurt longer-dated bonds and made the yield curve steeper.
“There’s the thought that maybe they will let inflation run a little bit higher and not raise rates,” said Dan Mulholland, managing director in Treasuries trading at BNY Mellon in New York.
Benchmark 10-year notes were last down 3/32 in price to yield 2.63 percent, up from 2.62 percent late on Thursday.
The higher yields helped the dollar, with the dollar index up 0.16 percent at 80.444. That shaved the index’s weekly loss to 0.2 percent.
The dollar was last up 0.2 percent against the yen at 102.12 yen, while the euro slipped 0.2 percent to $1.3578 .
Brent oil prices dropped 28 cents to $114.78 from a high of $115.71 touched on Thursday. U.S. oil added 61 cents to $107.04.
“The events unfolding in Iraq will continue to dictate the direction on the market and support the oil price for the time being at a high level,” said Barbara Lambrecht, an analyst at Commerzbank in Frankfurt. (Reporting by Michael Connor in New York; Editing by Dan Grebler)