* Wall St off for week, European stocks rise for 6th week

* Dollar index hits highest since April 2003 on rate outlook

* Brent, WTI continue to slide (Revises comment, updates prices)

By Rodrigo Campos

NEW YORK, March 13 (Reuters) – The dollar continued to power higher on Friday, pressuring stocks and commodities, on expectations of a Federal Reserve interest rate hike that stand in contrast to easing monetary policy actions by most other major central banks.

The dollar index was on track for a back-to-back weekly gain of more than 2 percent, setting up its strongest two-week performance in almost five years.

Stocks fell on Wall Street, with the S&P 500 set to fall for a third straight week. The index is about 3 percent below its record high set this month. Energy stocks were among the biggest losers, falling along with a steep decline in crude oil.

“If the Fed were to raise rates by say 25 basis points, historically there’s not a precedent for a horrible (bearish) reaction from the equities market,” said Mark Spellman, portfolio manager of Alpine’s Equity Income Fund in Purchase, New York.

“What is different, is the strength of the dollar is having an impact. The market doesn’t know how to react,” he said.

The Dow Jones industrial average fell 210.8 points, or 1.18 percent, to 17,684.42, the S&P 500 lost 19.39 points, or 0.94 percent, to 2,046.56, and the Nasdaq Composite dropped 40.60 points, or 0.83 percent, to 4,852.70.

The MSCI All-Country World equity index was down 0.8 percent, and emerging-markets stocks fell 1.2 percent.

The FTSEurofirst 300 pan-European index closed up 0.3 percent. Stocks in Europe continued to be supported by the massive bond-buying program at the European Central Bank.

Investors are now looking ahead to the Federal Reserve’s policy meeting on Tuesday and Wednesday, hoping that it will yield clues about the timing of a rate increase.

The divergence in monetary policy continued to push the euro lower against the greenback, hitting a 12-year low of $ 1.0481. It was last down 1.2 percent at $ 1.0509.

The dollar rallied even after disappointing U.S. inflation and consumer sentiment data, which normally would weaken the currency.

The Mexican peso weakened versus the dollar after a two-day respite, trading about 1 percent away from its record low hit on Wednesday.

“What we see is a dollar move, massive dollar buying from real money as well as hedge funds. It’s being bought all across the board versus all currencies and those relying heavily on short-term inflows are being hit the hardest,” said Bernd Berg, strategist at Societe Generale (Paris: FR0000130809 – news) in London.

The dollar index added 0.6 percent to 100.06.

U.S. crude fell 3.8 percent to $ 45.22 per barrel, while Brent crude fell 2.4 percent to $ 55.73. The global oil glut is getting bigger and U.S. production shows no sign of slowing, the International Energy Agency said.

The U.S. benchmark 10-year Treasury note yield edged up to 2.1122 percent from Thursday’s 2.096 percent, reflecting a price decrease of 5/32.

“The market’s consolidating,” said Kim Rupert, managing director of global fixed income at Action Economics in San Francisco. “It’s hard to be a buyer at this point.”

Spot gold was little changed near $ 1,153 an ounce, following nine consecutive sessions of declines. Copper was little changed on the day and on track to finish the week with a 1.7 percent gain. (Reporting by Rodrigo Campos; Additional reporting by Sujata Rao-Coverley in London and Michael Connor in New York; Editing by James Dalgleish and Leslie Adler)