By Akane Otani and Ben St. Clair 

U.S. stocks inched higher Friday, on course to end the week little changed, as the dollar resumed its recent slide.

The Dow Jones Industrial Average rose 28 points, or 0.1%, to 25092. The S&P 500 was up less than 0.1% and the Nasdaq Composite edged up 0.2%.

Major indexes struggled to break higher throughout the week as investors parsed dozens of earnings reports and rebukes from President Donald Trump on Federal Reserve policy sent the dollar lower.

Mr. Trump on Twitter criticized China, the European Union and other countries for "manipulating their currencies and interest rates lower" and said the strengthening U.S. dollar was "taking away our big competitive edge." The remarks echoed comments the president made Thursday criticizing the Fed for raising interest rates -- a departure from the convention presidents have followed of not commenting on Fed policy.

The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was recently down 0.6%, while U.S. Treasurys weakened, with the yield on the benchmark 10-year U.S. Treasury note recently at 2.891%, versus 2.845% Thursday. Bond yields rise as prices fall.

Meanwhile, industrial and agricultural heavyweights came under pressure after Mr. Trump on Friday reiterated his threat to impose tariffs on every dollar of China's roughly $500 billion in exports to the U.S. Agricultural machinery maker Deere fell 1.6%, while Caterpillar lost 1%.

Still, even as trade tensions have flared this year, analysts and investors say upbeat earnings and economic data are helping them remain cautiously optimistic. S&P 500 firms are on track to report their second fastest pace of earnings growth since 2010 for the second quarter, according to FactSet, pointing to sustained momentum in the U.S. even as growth elsewhere around the world has faltered.

Microsoft jumped 2.5% after reporting Thursday that its annual revenue topped $100 billion for the first time thanks to gains in its cloud business, while Honeywell International rose 3.8% after boosting its sales guidance.

"Even though we're the ones initiating this round of the trade war, we're likely to suffer the least," said Brian Nick, chief investment strategist at Nuveen. The stock market may not race higher at the pace it did in January, but it now trades at valuations that look more reasonable, Mr. Nick added.

Elsewhere, the Stoxx Europe 600 dropped 0.1%, pushed lower by the autos and basic resources sectors, although it logged its third consecutive weekly gain.

The Shanghai Composite Index rose Friday but posted its eighth weekly decline in nine as Chinese yuan hit one-year lows against the dollar following Mr. Trump's latest threats to impose tariffs on China. Beijing guided its official exchange rate down by 0.9% Friday, spurring its largest retreat in two years.

A weaker yuan makes Chinese exports less expensive for foreign buyers, something that Mr. Trump has described as a form of currency manipulation. But analysts say that the yuan's depreciation has been spurred not just by trade fears but also by signs of slowing growth in China.

On the trade front, "there's a whole flurry of statements being made," but a lack of action for the most part, said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

"I think watch and wait is still the order of the day," he added.

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

July 20, 2018 13:29 ET (17:29 GMT)

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