USA stocks added to gains, while Treasury yields fell and the dollar weakened on Wednesday, after the Federal Reserve raised interest rates for the second time in three months but did not flag any plan to accelerate the pace of monetary tightening.
The S&P 500 Index lost 0.2 percent to 2,381.38 at 4 p.m.in NY, while the Dow Jones Industrial Average fell 16 points to 20,934.55. The yield on the 10-year Treasury rose to 2.52% from 2.50% late Wednesday.
As yields recovered a little on Thursday, currency traders bought back cautiously into the dollar, with its basket index - which measures it against six major peers - slightly above the one-month low it had hit in the immediate aftermath of the Fed but still down on the day.
"It was a well-prepared hike, and when you consider the fact that Yellen and Co kept the outlook for growth and inflation largely unchanged, I would call this a dovish hike", said DZ Bank analyst Rene Albrecht, in Frankfurt.
Holdings of the world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares (GLD), fell 0.28% on Thursday, the first outflow this week. South Korea´s market climbed 0.6 percent, and even Japan´s Nikkei managed a slight rise despite the damage done to exporters by a firmer yen.
"It seems to us that this is a classic "buy the rumour, sell the fact" scenario as we can not help but think the market is heavily long of dollars", said Stephen Simonis, chief currency consultant with online FX trader FXDD Global.
While the Fed raised interest rates by 25 basis points on Wednesday, it kept to its original forecast of three rate hikes this year, disappointing investors who were expecting four.
Gold XAU= inched 0.1 percent lower to $1,225.14 an ounce, as investors took profits after strong gains this week on the Fed's more moderate monetary policy stance.
The S&P 500 posted 52 new 52-week highs and one new low; the Nasdaq Composite recorded 139 new highs and 49 new lows. Wilders, like Marine Le Pen in France (http://www.marketwatch.com/story/is-frexit-next-why-france-is-starting-to-really-freak-out-investors-2017-02-07), has expressed an interest in the Netherlands leaving the European Union, something that caused widespread volatility when the United Kingdom voted to do so in June.
In Europe, millions of Dutch voters go to the polls Wednesday in an election overshadowed by a blazing diplomatic row with Turkey, with all eyes on the fate of far-right MP Geert Wilders. On Thursday, it jumped to a two-week high after a decision by the Bank of England to hold interest rates steady, while hinting it might raise them soon. The euro was last down 0.2 percent at $1.0740.
COMMODITIES: Benchmark U.S. crude slipped 16 cents to $48.70 a barrel. "While the dollar sell off may last for a day or two our thinking is that buying these. dips is still a good strategy".