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By Alden Bentley, Naomi Rovnick and Ankur Banerjee
NEW YORK/LONDON/SINGAPORE (Reuters) -Global stocks, the dollar and some Treasury yields looked set to wrap up Christmas week on Friday with minor retracements of broad up-trends, succumbing to a dearth of interest and participation heading into the last weekend of the year.
Wall Street's main indexes opened lower, dampening an upbeat holiday-shortened week that started out looking like a classic "Santa Claus" rally was unfolding. The benchmark 10-year Treasury yield was up slightly but hovered below a near-eight-month high reached Thursday, while shorter-term Treasury yields eased.
The U.S. dollar was headed for an almost 7% annual gain while Japan's yen was set for a fourth consecutive year of losses on Friday, as traders anticipated robust U.S. growth, as well as tax cuts, tariffs and deregulation by the incoming administration of President-elect Donald Trump, would make the Federal Reserve cautious on rate-cutting well into 2025.
The Dow Jones Industrial Average was 0.56% lower after the open. The S&P 500 fell 0.65%, leaving Wall Street's benchmark on course for a 1% weekly gain. The Nasdaq Composite was down 0.79% in early trade.
The Dow is up 14% in 2024, the S&P 500 is up 25% and the tech-heavy Nasdaq is up 30%.
Analysts said stock markets could change direction as investors returned from holiday and reassessed the risks of elevated U.S. inflation under Trump for richly-valued Wall Street equities.
"There is some potential upside left for this bull market, but it is limited," said Pictet Asset Management chief strategist Luca Paolini.
"(Trump's) inauguration day is a potential inflection point and all the (prospective) good news will be in the price by then," Paolini added.
MSCI's broad global share index was 0.32% lower on Friday to remain 1.07% higher for the week.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.12%, marking a 1.5% weekly rise, while Tokyo's Nikkei rose 1.8%.
Europe's Stoxx 600 was 0.27% firmer on Friday and 0.7% higher for the week.
The dollar index, which measures the currency against six other major currencies, eased 0.09%, looking at a small weekly gain, and to close 2024 with a more than six percent year-on-year gain.
Dollar/yen was down 0.15%, but near levels last seen in July, while the greenback was also showing a 5.3% gain this month against the yen and a near 12% advance for 2024 against the weakened Japanese currency. The euro , up 0.09%, stayed close to two-year lows.