PDCO Patterson Companies Inc

By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica

Major indexes on track for second straight weekly advance

U.S. stocks pulled back modestly from near record levels on Friday as investors struggled to maintain upside momentum as the dollar continued to charge higher.

Major indexes opened higher, with the Nasdaq Composite notching an intraday record, but they were unable to maintain their rise. Still, they are on track for their second straight weekly advance, and the Russell 2000 will chalk its 11th straight daily advance if it closes higher. The index has hit a series of records of late, as investors increasingly favor small-cap stocks (http://www.marketwatch.com/story/stock-market-investors-turn-to-small-caps-after-trump-win-2016-11-15).

The market has been in an uptrend all month, but the gains accelerated after the unexpected election of Donald Trump. Many investors think that Trump's policy proposals--including massive cuts to corporate tax rates and financial and environmental deregulation--will spur growth, inflation and higher interest rates. More than half (http://www.marketwatch.com/story/stock-markets-trump-rally-is-mostly-a-bank-rally-2016-11-17) of the S&P 500's postelection gains have come from the financial sector.

Read:Here are Goldman's 2017 forecasts for stocks, oil and more--in one chart (http://www.marketwatch.com/story/here-are-goldmans-2017-forecasts-for-stocks-oil-and-more-in-one-chart-2016-11-18)

"You can make the case that we'll have a more business-friendly environment in Washington, and at the same time, economic data has already been getting better, so our backdrop seems strong as well," said Art Hogan, chief market strategist at Wunderlich Securities.

While Hogan said that market could pull back in the near term as investors take profits, he added that "this feels like a rally that can continue."

The Dow Jones Industrial Average fell 35 points to 18,870, while the S&P 500 fell 4.8 points to 2,188 and the Nasdaq Composite Index dipped 12.5 points to 5,322. Earlier, the Nasdaq traded as high as 5,346.60--an intraday record. All three indexes fell 0.2% on the day.

For the week, the Dow is up 0.2% while the S&P is up 0.8% and the Nasdaq is up 1.6%.

Health care stocks were the weakest of the day, with the S&P health care sector down 1%. Patterson Companies Inc.(PDCO) fell 3% while Illumina Inc. (ILMN) lost 2.5%.

Energy stocks were the top gainers of the day, up 0.3%. The rise came despite a drop in the price of crude oil (http://www.marketwatch.com/story/oil-stumbles-on-dollar-strength-lack-of-faith-in-opec-output-deal-2016-11-18). Chevron Corp.(CVX) rose 0.4%.

Investors are watching the U.S. dollar, which has seen the ICE Dollar index hit its highest level since 2003. A stronger dollar can erode the profitability of large-cap companies, which is one reason investors have been moving to small-cap stocks (http://www.marketwatch.com/story/stock-market-investors-turn-to-small-caps-after-trump-win-2016-11-15) since the election. The index rose 0.5% on Friday, a move that comes after Federal Reserve Chairwoman Janet Yellen signaled Thursday that a December interest-rate hike (http://www.marketwatch.com/story/yellen-says-fed-may-hike-interest-rates-relatively-soon-2016-11-17) was likely to go ahead.

Need to know:The S&P 500 is also getting ever-so-close to a record (http://www.marketwatch.com/story/a-trump-trade-war-why-goldman-thinks-investors-shouldnt-believe-the-hype-2016-11-18)

In a continuation of Thursday's action, the yield on the 10-year Treasury note rose to 2.34%.

Fed speakers ahead: Investors might look for guidance from more policy makers on Friday. St. Louis Fed President James Bullard said at a conference in Frankfurt that he's leaning toward the likelihood of an interest-rate hike in December, according to a report from CNBC (http://www.cnbc.com/2016/11/18/feds-bullard-says-hes-leaning-toward-supporting-a-december-rate-hike.html).

Dallas Fed President Rob Kaplan will speak at 1:30 p.m. Eastern Time in Houston, while Kansas City Fed President Esther George is set to talk at the Dallas Fed.

Also on the docket is Fed Gov. Jerome Powell, who is scheduled to appear at the San Francisco Fed.

Stocks to watch: Abercrombie & Fitch Co.(ANF) shares slid 14% as profit dived and the company announced a rebranding (http://www.marketwatch.com/story/abercrombie-fitch-profit-tumbles-as-it-rebrands-2016-11-18). Foot Locker Inc.(FL) rose 0.2% after it announced results (http://www.marketwatch.com/story/foot-locker-beats-profit-expectations-while-sales-match-2016-11-18).

Salesforce.com Inc.(CRM) rose 3.6% after the cloud-computing company posted rising revenue and boosted its outlook (http://www.marketwatch.com/story/salesforce-posts-rising-revenue-lifts-outlook-2016-11-17-1948519). But shares of Applied Materials Inc.(AMAT) fell 0.3% after the chip-equipment maker missed expectations for new orders (http://www.marketwatch.com/story/applied-materials-profit-up-21-new-orders-miss-2016-11-17).

Read:Salesforce sets finish line in race to $10 billion (http://www.marketwatch.com/story/salesforce-sets-finish-line-in-race-to-10-billion-2016-11-17)

Gap Inc.(GPS) slid 14% after the retailer posted a weak outlook. late Thursday. (http://www.marketwatch.com/story/gap-shares-fall-on-weak-outlook-2016-11-17)

Other markets: European stocks (http://www.marketwatch.com/story/banks-commodity-stocks-slide-put-pressure-on-european-markets-2016-11-18) pulled back slightly on Friday, led by banking and commodity names. European Central Bank President Mario Draghi (http://www.marketwatch.com/story/ecbs-draghi-signals-stimulus-will-be-extended-2016-11-18) signaled Friday that the central bank's stimulus will be extended for the region, whose economy remains clouded by risks.

Asian markets (http://www.marketwatch.com/story/asian-markets-rise-nikkei-hits-10-month-high-in-intraday-trading-2016-11-17) had a mixed day, though yen weakness gave a boost to the Nikkei 225 index , which rose 0.6%.

The dollar's move higher took a toll on gold (http://www.marketwatch.com/story/gold-slides-toward-1200-as-us-rate-hike-looks-imminent-2016-11-18), which dipped 0.8%.

(END) Dow Jones Newswires

November 18, 2016 11:45 ET (16:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.