By Chuck Mikolajczak
NEW YORK (Reuters) - World stocks advanced on Friday and were poised for a modest gain to end the week as a drop in the dollar helped boost sagging oil prices.
The dollar fell against a basket of major currencies as preliminary data on U.S. factory and services activities in June fell short of analyst forecasts, stoking doubts about U.S. economic growth for the rest of 2017.
That drop in the greenback helped crude oil pull away from 10-month lows, although prices were still set for their worst first-half performance since 1997. On the week, both Brent and WTI crude have lost nearly 4 percent.
"Oil is probably trying to recoup some of the losses that they’ve had this week," said Jim Davis, regional investment manager at U.S. Bank Wealth Management in Springfield, Illinois.
U.S. crude
The climb in crude helped lift energy stocks on Wall Street, with the group (SPNY) up 0.8 percent as the best performing of the major S&P sectors.
The U.S. dollar briefly managed to recoup some of its declines after economic data showed new U.S. single-family home sales rose in May and the median sales price surged to an all-time high. The PHLX housing index (HGX) advanced 0.7 percent.
The Dow Jones Industrial Average (DJI) rose 14.29 points, or 0.07 percent, to 21,411.58, the S&P 500 (SPX) gained 4.95 points, or 0.20 percent, to 2,439.45 and the Nasdaq Composite (IXIC) added 15.91 points, or 0.26 percent, to 6,252.60.
"The data has been mixed today and it kind of reflects what has been going on all month and that is the economy, both globally and in the U.S., we are expanding but the pace of expansion is not accelerating," Davis said.
The slide in energy prices in recent weeks has worsened the outlook for inflation, creating a problem for the world's major central banks as they attempt to normalize interest rates after years of ultra-loose policy.
The pan-European FTSEurofirst 300 index (FTEU3) lost 0.18 percent and MSCI's gauge of stocks across the globe (MIWD00000PUS) gained 0.25 percent.
The dollar index (DXY) fell 0.37 percent, with the euro <EUR=> up 0.44 percent to $1.1199.
The dollar peaked at a one-month high on Tuesday following comments with a hawkish tone from Fed officials including New York Fed President William Dudley and Boston Fed President Eric Rosengren. But it has been stuck in a tight range since and virtually flat on the week.
Earlier on Friday, St. Louis Fed President James Bullard said the central bank should wait on any further rate increases until it is clear inflation is reliably heading to the Fed's 2 percent target.
Fed Board Governor Jerome Powell and Cleveland Fed President Loretta Mester also are due to speak on Friday.
The lower dollar also helped boost gold prices, but the prospect of further interest rate rises in the United States limited gains.
Spot gold <XAU=> added 0.4 percent to $1,255.71 an ounce. U.S. gold futures