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* Bank profits boost S&P, Nasdaq; consumer stocks weigh on Dow
* Britain's FTSE extends historic winning streak
* Dollar edges off five-week lows after U.S. retail sales data
* Oil falls on China concerns, set for weekly drop on OPEC doubts
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 13 (Reuters) - European stocks advanced on Friday, while the S&P 500 and Nasdaq rose in line with gains in U.S. Treasury yields, as investors were encouraged by upbeat bank earnings and positive U.S. economic data.
Investors largely shrugged off the biggest fall in Chinese exports since 2009 to focus on U.S. data that overall suggested stronger growth. Market participants largely resumed buying across equity markets based on higher growth expectations that had tailed off this week, with bank shares leading the way.
Top U.S. bank executives, in their first public comments about quarterly earnings, expressed optimism about the outlook this year as leading financial institutions recorded profits for the fourth quarter.
Bank of America Merrill Lynch, for instance, reported a 47-percent rise in fourth-quarter profit, while JP Morgan Chase also reported strong earnings, with a 24-percent rise in profit.
U.S. economic data have also boosted the market, as retail sales rose in December given strong demand for automobiles and furniture. Producer prices expanded as well.
"I think this reflects optimism about an uncertain future," said Juan Perez, foreign exchange trader at Tempus Consulting in Washington.
"Trump ... is coming in with a Republican administration which is historically pro-business," he added. "They're going to deregulate, they're going to open markets, they're also going to expand economic growth by investing in infrastructure."
In afternoon trading, the Dow Jones Industrial Average was down 0.1 percent at 19,869.62, while the S&P 500 gained 0.1 percent to 2,273.18. The Nasdaq Composite , on the other hand, added 28.13 points, or 0.5 percent to 5,575.85.
The dollar, meanwhile, was down 0.1 percent against a basket of major currencies at 101.25, but was off a five-week low hit earlier this week. The greenback was down 0.2 percent at 114.51 yen.
The dollar index, though, was still headed for its worst weekly performance in more than two months.
"Markets, overall, have stabilized following the post-Trump press conference shake-up," said Action Economics in its latest blog. "Some consolidation is expected now (in dollar/yen), though should data continue to strengthen, keeping Fedspeak leaning to the hawkish side. Dollar/yen upside can be expected to resume."
The so-called 'reflation trade' that had sent the dollar to a 14-year high last month was based on Trump's campaign promises of increased fiscal spending, lower taxes, and deregulation, all of which are inflationary and would likely drive the Federal Reserve to raise interest rates faster than its normal pace.
U.S. Treasury yields rose across the board, bolstered by Friday's better-than-expected data, led by U.S. retail sales, producer prices, as well as the big rise in U.S. inflation expectations as shown in the University of Michigan consumer sentiment report.
Benchmark U.S. 10-year yields fell 10/32 in price, yielding 2.398 percent, up from Thursday's 2.361 percent. German 10-year bond yields were also higher, up at 0.264 percent, from 0.234 percent late on Thursday.
Europe's broad FTSEurofirst 300 index closed up 1 percent to 1,447.22.
Germany's DAX was up 0.94 percent and Britain's FTSE 100 rose 0.6 percent, its 14th consecutive daily gain.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.15 percent after rising to its highest since late October the previous session. It was up 1.8 percent for the week.
Japan's Nikkei stock index finished up 0.8 percent, though it still ended the week down 0.9 percent.
In commodity markets, Brent crude was down 0.93 percent, at $55.49 a barrel, while U.S. crude fell 1.1 percent, at $52.43 per barrel.
Spot gold was up slightly at $1,196.40 an ounce, having risen overnight to a seven-week high above $1,200. (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Jamie McGeever in London; Editing by James Dalgleish and Nick Zieminski)