Global stocks edge up; bonds, gold fall as investors add risk

By Caroline Valetkevitch

NEW YORK (Reuters) - World stock indexes mostly rose on Wednesday following mostly upbeat U.S. corporate earnings, while U.S. bond prices and gold fell as markets indicated improving risk sentiment.

The dollar recovered from recent weakness against the euro and the safe-haven yen, while sterling was off six-month highs, which it hit following Tuesday's calling of a snap UK election.

Questions still hung over the 'reflation' trades that had lifted markets since Donald Trump became U.S. president. A run of disappointing U.S. economic data and doubts the Trump administration will progress with tax cuts have quelled expectations of faster inflation.

Stock investors have turned their focus to quarterly results from U.S. companies, which so far have been mostly better than expected. Morgan Stanley was up 2.7 percent following its results.

"While there has been some disappointment, the big picture has not vastly changed," said James Athey, senior investment manager at Aberdeen Asset Management. "We're still talking about a global economy which is doing better... and central banks that are looking to normalize, and all of that should be supportive for risk assets."

The S&P 500 gained 6.32 points, or 0.27 percent, to 2,348.51 and the Nasdaq Composite added 36.37 points, or 0.62 percent, to 5,885.84. The Dow Jones Industrial Average was down 24.48 points, or 0.12 percent, to 20,498.8.

The pan-European STOXX 600 index, which hit a three-week low on Tuesday, rose 0.3 percent, while Britain's FTSE 100 index fell 0.5 percent.

Sterling was just off a six-month peak against the dollar above $1.28 having surged when British Prime Minister Theresa May called an early general election for June 8, seeking to strengthen her party's majority ahead of Brexit negotiations.

British stocks are vulnerable to a rising pound because more than two-thirds of FTSE 100 company earnings are derived from operations overseas.

The greenback was 0.54 percent higher against the yen and up 0.17 percent against the euro.

Four days before the first round of the presidential election in France, just a few points separate the top four candidates, including two who oppose the euro - the far-right's Marine Le Pen and the far-left's Jean-Luc Melenchon.

In the U.S. Treasury market, 10-year notes were last down 6/32 in price to yield 2.20 percent.

Gold was down 1 percent, with spot gold falling as low as $1,275.73 per ounce.

Oil edged lower, reversing earlier gains. Brent crude futures were down 36 cents at $54.53 a barrel, while U.S. crude futures were down 34 cents at $52.07.

(Additional reporting by Jamie McGeever in London and Karen Brettell and Saqib Iqbal Ahmed in New York and Yashaswini Swamynathan in Bengaluru; Editing by Hugh Lawson and Nick Zieminski)