(Updates prices to late U.S. afternoon trading; adds comments)
* S&P 500, Nasdaq touch record high
* Dollar hit by Trump's disclosure, economy concern
By Rodrigo Campos
NEW YORK, May 16 (Reuters) - The U.S. dollar index touched its lowest since early November on Tuesday, hurt by weaker-than-expected U.S. housing data and concerns after political turmoil once again hit Washington.
A rally in the euro was reinforced by dollar losses, prompted by allegations that U.S. President Donald Trump disclosed highly sensitive intelligence information to senior Russian officials at a meeting last week.
The disclosure adds to concern over the administration's chances of passing legislation, including a tax reform, that has partly been priced in by financial markets. Stocks remain at or near record highs, supported by the strongest earnings season for S&P 500 components since 2011.
The dollar fell after the poor housing data and despite U.S. manufacturing production recording its largest increase in more than three years.
The downtrend in the U.S. currency could extend further, according to Boris Schlossberg, managing director of FX strategy at BK Asset Management, given the potential for further political fallout relating to Trump's intelligence disclosure.
"It seems like progressively every single day it gets more and more beyond any sense of normal leadership and ultimately that kind of political volatility does translate into economic volatility," Schlossberg said.
The dollar index fell 0.77 percent, with the euro up 1.06 percent to $1.1089.
The dollar index had reached 14-year highs in early January on the view that Trump's plans for tax cuts and infrastructure spending would boost growth and inflation. But it fell to six-month lows on Tuesday.
The Japanese yen strengthened 0.64 percent versus the greenback at 113.08 per dollar, while Sterling was last trading at $1.2919, up 0.20 percent on the day.
On Wall Street, the S&P 500 and Nasdaq Composite touched record highs but the S&P retreated to trade slightly negative. Traders shared concerns about the feasibility of the Trump agenda of tax cuts and deregulation, without taking their eyes off the expected economic growth.
"It's a combination of earnings and better-than-expected industrial production countered with concerns about future economic data and the fact we continue to see weak retail sales," said Kate Warne, investment strategist at Edward Jones in St. Louis.
"With the consumer being more than two-thirds of economic growth, if consumer spending is weak, can we continue to see solid economic growth?"
The Dow Jones Industrial Average fell 6.18 points, or 0.03 percent, to 20,975.76, the S&P 500 lost 2.16 points, or 0.09 percent, to 2,400.16 and the Nasdaq Composite added 16.45 points, or 0.27 percent, to 6,166.13.
The pan-European FTSEurofirst 300 index rose 0.08 percent and MSCI's gauge of stocks across the globe gained 0.28 percent.
Emerging market stocks rose 0.51 percent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.37 percent higher, while Japan's Nikkei rose 0.25 percent.
Oil prices were little changed as traders awaited weekly U.S. inventory data and after Kuwait joined top producers Saudi Arabia and Russia in support of prolonging supply cuts through March 2018 to reduce a global crude glut.
U.S. crude fell 0.49 percent to $48.61 per barrel and Brent was last at $51.62, down 0.39 percent on the day.
U.S. Treasury yields fell after the housing data added to recent soft economic news that has raised new doubts over how many times the Federal Reserve will raise interest rates this year.
Benchmark 10-year notes last rose 3/32 in price to yield 2.3274 percent, from 2.338 percent late on Monday.
Spot gold added 0.5 percent to $1,236.91 an ounce. U.S. gold futures gained 0.57 percent to $1,237.00 an ounce.
Copper lost 0.04 percent to $5,610.85 a tonne.
Reporting by Rodrigo Campos, additional reporting by Scott DiSavino, Karen Brettell, Dion Rabouin and Sinead Carew; Editing by Nick Zieminski and Dan Grebler