By Ryan Vlastelica

NEW YORK (Reuters) – U.S. stocks were mostly lower on Thursday, continuing a recent bout of volatility as the dollar resumed its upward trend while the euro fell sharply.

Thursday’s activity represented a retreat from the previous session’s heavy move into riskier assets such as stocks and oil brought on by comments from the Federal Reserve, which struck a more dovish tone than investors had anticipated.

The dollar on Thursday rebounded from its biggest one-day fall against the euro and sterling in six years. The euro fell more than 2 percent on the day, continuing a downward slope that has seen the currency tumble more than 20 percent against the dollar since mid-2014.

The U.S. central bank on Wednesday indicated it preferred a more gradual path to normalizing benchmark interest rates, slashing rate projections over the next few years and lowering its outlook on the U.S. economy.

Omar Aguilar, chief investment officer of equities for Charles Schwab Investment Management in San Francisco, said the reaction to the comments was “not the kind of market that’s going to prevail, so it makes sense that pretty much everything we’re seeing today is just a reversal of yesterday’s move.”

Over the longer term, he added, “I expect the dollar to remain strong and commodity prices will continue to be weak.”

The U.S. dollar index <.DXY>, which measures the greenback against a basket of major currencies, rose 0.8 percent. The dollar rose 0.71 percent to 120.94 yen

The euro fell 2.1 percent to $ 1.0645, extending its year-to-date decline to 12 percent. Further weakness could come with the European Central Bank just starting its bond-buying program and Greek debt negotiations still unresolved; Aguilar said the odds were “pretty high” that the currency would fall under parity with the dollar.

The Dow Jones industrial average <.DJI> fell 103.78 points, or 0.57 percent, to 17,972.41, the S&P 500 <.SPX> lost 9.96 points, or 0.47 percent, to 2,089.54 and the Nasdaq Composite <.IXIC> added 7.79 points, or 0.16 percent, to 4,990.62.

The Nasdaq was supported by strength in large-cap biotech stocks. Regeneron Pharma rose 2.5 percent to $ 483.90 while Biogen Idec rose 2.4 percent to $ 438.35.

In Europe, the FTSEurofirst 300 <.FTEU3> index of top regional shares closed 0.46 percent higher at its highest since 2007.

MSCI’s all-country world index <.MIWD00000PUS>, a measure of equity performance in 46 countries, was flat on the day, paring earlier gains of nearly 0.9 percent.

Benchmark 10-year U.S. Treasury yields edged lower after the Fed cut its inflation outlook for 2015 following its latest two-day policy meeting.

Ten-year Treasury notes were last down 9/32 in price to yield 1.9807 percent.

Brent crude oil fell back towards $ 54 a barrel after Kuwait said the Organization of Petroleum Exporting Countries had no choice but to keep production steady, refocusing the market on global oversupply.

Brent for May delivery fell 3.3 percent to $ 54.08 a barrel. U.S. crude for April delivery fell 3.3 percent to $ 43.19. Both had rallied sharply on Wednesday following the Fed’s comments, with Brent up nearly 4.5 percent.

Gold rose 0.1 percent on the day while silver jumped 1.4 percent and copper climbed 3.2 percent.

(Editing by James Dalgleish)