By Riva Gold 

U.S. stocks fell at the end of a choppy week.

Major indexes have swung between relatively small losses and gains in recent days, leaving the S&P 500 near where it ended last week.

The Dow Jones Industrial Average declined 84 points, or 0.5%, to 18078 in morning trading Friday, while the S&P 500 fell 0.4%. The Nasdaq Composite lost less than 0.1%.

Oil prices slipped and the dollar touched multimonth highs against the euro and Asian currencies.

Shares of Reynolds American rallied around 15% after cigarette giant British American Tobacco said it made a $47 billion takeover offer for the remaining stake in its U.S. peer.

Microsoft shares surged 4.5% to $59.80 after it beat forecasts for both sales and profit Thursday, putting it on track to surpass the company's record close of $59.56 hit during the dot-com boom in 1999.

General Electric fell 2% as its oil and gas business continued to weigh on revenue growth in the most recent quarter.

U.S. earnings so far have mostly beat lowered expectations, which analysts said was needed after the broader market climbed to record highs this summer.

The Stoxx Europe 600 slipped 0.2%. Shares of British American Tobacco rose 1.5% after news hit of its takeover offer, which would create the world's largest listed tobacco company by revenue and market value.

Shares in German luxury car maker Daimler fell roughly 2% despite the company beating analyst expectations for third-quarter profits.

Third-quarter earnings in the Stoxx Europe 600 are expected to decline 13% from a year earlier, according to analysts' estimates from Thomson Reuters.

For the week, the Stoxx Europe 600 was on track to gain around 1%, led by a recovery in the banking sector.

The euro fell 0.5% against the dollar to $1.0877 after touching its lowest level since March.

Traders were digesting comments from European Central Bank President Mario Draghi on Thursday, who denied reports that the bank's stimulus program could end abruptly.

The euro had initially risen as Mr. Draghi said the ECB didn't discuss extending its bond-buying program, but those gains were quickly reversed, as investors said his comments left the door open to extending the program at future meetings.

"Mr. Draghi was holding his cards very close to his chest," said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers. He expects the bank to announce an extension to its bond-purchase program in December.

The euro has fallen roughly 3% against the dollar so far this month.

The dollar also remained supported by growing expectations that the Federal Reserve would raise interest rates in December. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was up 0.3%.

Fed funds futures, used by investors to bet on central-bank policy, suggest a roughly 70% chance of higher rates by the end of the year, according to CME Group.

"We're in the midst of election fever, but for markets central banks are way more important," said Tina Byles Williams, chief investment officer at FIS Group.

The yield on the 10-year U.S. Treasury note was at 1.733%, compared with 1.745% Thursday. Yields move inversely to prices.

Stocks in Asia mostly edged lower, catching up with a small decline on Wall Street and oil's biggest daily drop since September. U.S. crude oil fell 0.4% to $50.43 a barrel Friday.

Japan's Nikkei Stock Average declined 0.3% for the day but rose 2% this week, while Australian stocks shed 0.2% to end the week flat.

The Shanghai Composite Index inched up 0.2%. The Chinese yuan touched a six-year low against the dollar in trading in mainland China, and a record low in trading outside of China at 6.7663.

The Hong Kong stock market was closed as the city shut down for a typhoon.

Write to Riva Gold at riva.gold@wsj.com

 

(END) Dow Jones Newswires

October 21, 2016 10:22 ET (14:22 GMT)

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