By Caroline Valetkevitch

NEW YORK (Reuters) – The dollar index edged higher on Friday and was on track to end January with gains of more than 5 percent, while stock indexes around the world fell as data showed U.S. growth slowed sharply in the fourth quarter.

European stocks ended lower, but registered their biggest monthly gain in three years, while major U.S. stock indexes were on track for a second straight monthly decline.

The dollar index <.DXY>, bolstered by expectations the U.S. Federal Reserve will be the first major central bank to raise interest rates, also was poised to end January with its longest run of gains since the greenback was floated in 1971. It was up 0.1 percent on Friday.

U.S. gross domestic product expanded at a 2.6 percent annual pace after the third quarter’s spectacular 5 percent rate, the Commerce Department said in its first snapshot of fourth-quarter GDP.

The headline number was “well below consensus expectations and that is definitely one of the data points that many bulls were looking for to justify staying bullish,” said Peter Kenny, chief market strategist at Clearpool Group in New York.

Adding to concerns for stock investors, Greece’s finance minister said the government would not cooperate with the European Union and International Monetary Fund mission bankrolling the country and would not seek an extension to the bailout program.

“The equity market is trying to deal with all the uncertainty around the world,” said Paul Zemsky, chief investment officer of Multi-Asset Strategies and Solutions at Voya Investment Management in New York.

On Wall Street, the Dow Jones industrial average <.DJI> fell 94.92 points, or 0.54 percent, to 17,321.93, the S&P 500 <.SPX> lost 9.85 points, or 0.49 percent, to 2,011.4 and the Nasdaq Composite <.IXIC> dropped 0.97 points, or 0.02 percent, to 4,682.43.

The FTSEurofirst 300 <.FTEU3> index of top European shares ended down 0.6 percent, but rose 7.2 percent in January, its biggest monthly gain in three years.

The MSCI all-country world index <.MIWD00000PUS> declined 0.6 percent.

European shares have been lifted recently by expectations that a bond-buying program by the European Central Bank will help the region’s economic recovery, while U.S. stocks have been hit by falling oil prices and concern about weak overseas demand.

U.S. Treasury debt prices jumped, with long-term yields hitting record lows after the slower-than-anticipated economic growth, which encouraged speculation the Fed will delay interest rate hikes.

Friday’s gains added to a strong Treasuries rally that has the 30-year Treasury on track for total returns in January of more than 10 percent.

Brent crude edged up 67 cents to $ 49.80 a barrel, supported by renewed violence in Iraq, but a persistent global supply glut kept the market on course for a seventh straight month of declines, its longest bear run on record. U.S. crude was up 97 cents at $ 45.50.

Russia surprised markets by cutting interest rates as fears of a Russian recession mount following a plunge in global oil prices and Western sanctions over the Ukraine crisis.

The move pressured the rouble , which skidded as much as 4 percent against the dollar, and bolstered expectations that Turkey will cut rates again next week, sending the lira to a new record low.

(Additional reporting by Rodrigo Campos in New York; Editing by Janet Lawrence, Susan Fenton, Meredith Mazzilli, and Chizu Nomiyama)