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NEW YORK (Reuters) - The Dow Jones industrial average and S&P 500 ended at record highs for a third straight day on Wednesday, while U.S. two-year Treasury yields and the dollar hit multi-year peaks after upbeat U.S. economic data reinforced expectations for interest rate hikes.
Gains in industrial stocks helped the U.S. indexes, with the S&P 500 industrial sector .SPLRCI ending up 0.8 percent. The S&P's gains were meager, while the Nasdaq slipped after a drop in tech heavyweights ahead of the Thanksgiving Day holiday on Thursday and an early market close on Black Friday. A 10.5 percent drop in Eli Lilly & Co (LLY.N) also weighed on the S&P.
The Nasdaq had touched record closing and intraday highs over the past two days. Expectations that markets would benefit from U.S. President-elect Donald Trump's policies have helped boost shares.
European shares steadied, with basic resources companies underpinning the broader market following a rise in metals prices. The European basic resources index .SXPP ended 1.2 percent firmer after hitting its highest level since mid-2015.
U.S. two-year Treasury note yields US2YT=RR rose to a 6-1/2 year high of 1.151 percent, while benchmark 10-year notes US10YT=RR hit 2.417 percent, the highest since July 2015. The peaks were touched after data showed that U.S. manufactured capital goods rebounded in October, boosting expectations for faster economic growth. [nL1N1DO1MK]
"Today is the beginning of the holiday, so many people have left or are on their way," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York. "You could continue to see a little bit an overreaction either way. ... But I think next week ... I wouldn't be surprised to see the market back off."
MSCI's all-country world equity index .MIWD00000PUS was last down 0.8 points, or 0.19 percent, at 412.57.
The Dow Jones industrial average .DJI ended up 59.31 points, or 0.31 percent, at 19,083.18. The S&P 500 .SPX closed up 1.78 points, or 0.08 percent, at 2,204.72. The Nasdaq Composite .IXIC closed down 5.67 points, or 0.11 percent, at 5,380.68. [nL1N1DO1Y2]
Europe's broad FTSEurofirst 300 index .FTEU3 closed roughly flat at 1,344.19.
The dollar index .DXY, which measures the greenback against a basket of six major currencies, surged to a more than 13-year peak of 101.910, bolstered by expectations that the Federal Reserve would tighten credit next month and in 2017. [nL1N1DO1GW]
"We have had a slew of data today, all supportive of the low threshold needed for rate increases," said Marvin Loh, senior global markets strategist, at BNY Mellon in Boston.
Oil prices fell slightly in volatile trade as investors doubted that the Organization of the Petroleum Exporting Countries would agree to a production cut large enough to make a significant dent in the global glut of crude as U.S. drilling rises.
Brent crude LCOc1 settled down 17 cents, or 0.35 percent, at $48.95 a barrel, while U.S. crude CLc1 settled down 7 cents, or 0.15 percent, at $47.96 a barrel.
Gold XAU= slid to a 9-1/2-month low of $1,181.45 an ounce. U.S. gold futures GCcv1 settled down 1.8 percent at $1,189.30.
Additional reporting by Yashaswini Swamynathan in Bengaluru, Jemima Kelly in London, and Karen Brettell, Gertrude Chavez-Dreyfuss and Catherine Ngai in New York; Editing by Chizu Nomiyama and Richard Chang