Dollar, bond yields up on strong U.S. data; Wall Street dips

NEW YORK (Reuters) - The dollar and U.S. Treasury yields gained on Thursday after a batch of solid economic data, while Wall Street indexes slipped as investors held back a day ahead of the inauguration of President-elect Donald Trump.

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Oil futures rallied from one-week lows after the International Energy Agency said crude markets were tightening. The S&P 500's energy index .SPNY, however, traded lower.

Benchmark 10-year U.S. Treasury notes US10YT=RR fell 23/32 in price to yield 2.47 percent, up from 2.39 percent late on Wednesday. The yields reached as high as 2.496 percent, the highest since Jan. 3, and have jumped from a low of 2.31 percent on Tuesday. Data showed U.S. homebuilding rebounded in December and the number of Americans filing for unemployment benefits unexpectedly fell last week to a near 43-year low.

Investors were also reacting to comments by Federal Reserve Chief Janet Yellen a day ago signaling a path of steady interest rate increases, taken as a sign of economic strength.

But the data was not enough to embolden U.S. equity investors, who were wary as they waited to see if Trump acts on pro-business promises such as tax cuts, fiscal stimulus and lighter regulation that had sent the S&P 500 up 5.8 percent since Nov. 8, one of the strongest transitions in history.

“There’s been a lot of positive news priced into the market so it’s taking a break on the equities side,” said Wade Balliet, Chief Investment Strategist, Bank of the West, based in Denver who said investors are “getting nervous trying to piece together what the policies will be.”

Investors shouldn’t expect clarity from the inauguration speech but would hope for signals in coming weeks, Balliet said.

The S&P 500 sank 5.3 percent on outgoing President Barack Obama’s inauguration day and fell 20.4 percent in the first 34 trading days of his administration, bottoming on March 9, 2009. But it has nearly tripled from that low, and including reinvested dividends has delivered a total return of nearly 295 percent.

The Dow Jones Industrial Average .DJI closed down 72.32 points, or 0.37 percent, to 19,732.4, the S&P 500 .SPX lost 8.2 points, or 0.36 percent, to 2,263.69 and the Nasdaq Composite .IXIC fell 15.57 points, or 0.28 percent, to 5,540.08.

The dollar .DXY was up 0.2 percent against a basket of major currencies after paring gains. It had risen as much as 8 percent, boosted by the economic data and Yellen's comments. Yellen was due to speak again on Thursday evening.

Trading in European equities and the euro was choppy after ECB President Mario Draghi said interest rates would stay at current or lower levels for an extended period and the ECB would increase or extend bond purchases if the outlook worsens.

The euro EUR= clawed back losses against the dollar in choppy trade and was last up 0.25 percent after falling as much as 0.4 percent after Draghi's comments.

U.S. crude CLc1 settled up 0.6 percent to $51.37 per barrel, after shedding 2.67 percent on Wednesday. Brent crude LCOc1 finished up 0.5 percent at $54.16 after settling down 2.79 percent the day before.

Gold XAU= was up 0.1 percent after falling as much as 0.7 percent earlier in the day. It is on track for a 4.6 percent gain for the month as many investors have sought a safe haven.

Additional reporting by Karen Brettell and Dion Rabouin in New York, Patrick Graham and Kit Rees in London and Lisa Twaronite in Tokyo; Editing by Meredith Mazzilli and James Dalgleish