Updated at 10:16 a.m. ET/1416 GMT

By Chuck Mikolajczak

NEW YORK, June 21 (Reuters) -A gauge ofglobal stocks dipped for a second straight session onFriday and the dollarhit its highest level since early May as a gauge of U.S. businessactivity edged up to a more than two-year high.

S&P Global said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors,inched up to 54.6 this month, the highest since April 2022, from a 54.5 reading in May. A reading above 50 indicated expansion.

However, while a rebound in employment helped lift the reading, price pressures eased, adding to recent data that has boosted optimism inflation may be cooling.

On Wall Street, the S&P 500 and Nasdaq were lower in the early stages of trading, weighed down by declines in the tech sector for a second day in a row as the furious rally in AI-related names shows signs of tiring after a run of several record closing highs in recent days.

The Dow Industrials advanced, boosted in part by gains in McDonald's MCD.N shares. The Dow is on track for its biggest weekly percentage gain since mid-May while the S&P is on pace for its third straight weekly advance. The Nasdaq is poised to snap a two-week streak of gains.

"The largest companies in the S&P 500 are excellent, very profitable and growing quickly ... but they are getting a little bit expensive," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

"We wouldn't be surprised if the market takes a breather and cools off a bit in the short term."

The Dow Jones Industrial Average .DJI rose 75.22 points, or 0.19%, to 39,209.98, the S&P 500 .SPX lost 4.13 points, or 0.08%, to 5,468.86 and the Nasdaq Composite .IXIC lost 12.22 points, or 0.07%, to 17,709.37.

MSCI's gauge of stocks across the globe .MIWD00000PUS fell 2.58 points, or 0.32%, to 801.77, falling further from the intraday record of 807.17 hit on Thursday although still on track for its third straight weekly advance.

Other economic data on the housing market showed U.S. existinghome sales fell for a third straight month in May as record high prices and a resurgence in mortgage rates kept potential buyers on the sidelines.

European stocks were also lower , pulled lower by bank stocks and technology shares as economic data showedeuro zone business growth slowed sharply this month.

The STOXX 600 .STOXX index fell 0.65%, while Europe's broad FTSEurofirst 300 index .FTEU3 fell 13.29 points, or 0.65%.

U.S. Treasury yields inched higher after the data, withthe yield on benchmark U.S. 10-year notes US10YT=RR up 0.1 basis point to 4.255%. The 10-year yield is on track for its first weekly climb after two straight declines.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.15% at 105.79, with the euro EUR= down 0.09% at $1.0689. Sterling GBP= weakened 0.15% at $1.2636.

Against the Japanese yen JPY=, the dollar strengthened 0.21% at 159.23 after reaching 159.47,a level not seensince late April when Japanese authorities intervened to halt the rapid fall in the currency.

Japanesedata earlier on Friday indicated the country'sdemand-led inflation slowed in May, clouding the picture for a rate hike from the Bank of Japan.

BoJ deputy governor Shinichi Uchida said on Friday the central bank was willing to raise rates if the economy and prices move in line with its forecasts, but signs of weakness remained.

The country's top currency diplomat, Masato Kanda, also said Japanese authorities are ready to take action against speculative and excessively volatile moves in the currency market that hurt the economy.

In commodities, U.S. crude CLc1 gained 0.17% to $81.43 a barrel and Brent LCOc1 rose to $85.88 per barrel, up 0.2% on the day and were on course for a second straightweekly advance on signs of improving demand.

Reporting by Chuck Mikolajczak; additional reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Nick Zieminski

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