* World stock index on track for best week since January * Dollar bounces, currencies steadier after wild ride * U.S. stocks little changed; oil ends higher By Caroline Valetkevitch NEW YORK, July 12 (Reuters) - The dollar bounced back from a steep sell-off on Friday while world stock indexes were mostly steady as equities markets took a break from their recent rally and investors focused on mixed U.S. corporate earnings. Gold dipped as the dollar rebounded and investors booked profits after four days of gains but was on track for its biggest weekly advance in nearly two years. Stocks, bond prices and commodities have rallied this week while the dollar tumbled on hints from Federal Reserve Chairman Ben Bernanke that the U.S. central bank was unlikely to phase out its stimulative bond buying before the U.S. unemployment rate improved further. Wall Street stocks were little changed, a day after the Dow and S&P 500 hit all-time closing highs. The S&P 500 was on track to end the week up 2.5 percent, its best weekly performance since January. Stronger-than-expected results from top U.S. banks JPMorgan Chase and Wells Fargo were offset by a disappointing outlook from United Parcel Service Inc., whose shares dropped 5.7 percent to $86.21 and were the biggest drag on the S&P 500. UPS, the world's biggest package delivery company, and smaller rival FedEX are considered economic bellwethers because of the high volume of goods they move around the world. European shares ended down slightly, with mixed economic data and renewed concerns about the political risks in the euro zone prompting investors to lock in profits at the end of the market's best week since April. Investors were also nervous about holding onto positions ahead of the release of Chinese second-quarter economic growth data, due before European markets open on Monday, which will be particularly important to the mining sector. The MSCI world index was down 0.01 percent, but was on track to post its best week since January. The broad FTSEurofirst 300 ended down 0.1 percent. The Dow Jones industrial average was off 34.85 points, or 0.23 percent, at 15,426.07. The Standard & Poor's 500 Index was up 0.93 points, or 0.06 percent, at 1,675.95. The Nasdaq Composite Index was up 14.05 points, or 0.39 percent, at 3,592.35. "I think the market has reason to move higher, but it's had a substantial run now," said Warren West, principal at Greentree Brokerage Services in Philadelphia. The S&P 500 rose 3.8 percent over the previous six sessions, its best six-day run since early January and longest winning streak since early March. The benchmark index was on track for a third consecutive week of gains. Boeing shares fell 5 percent to $101.50 after a Dreamliner operated by Ethiopian Airlines caught fire at Britain's Heathrow airport on Friday. Boeing accounted for 40 points of negative drag on the Dow industrials. After a week of swings in the world's big currencies, foreign exchange markets were trading more calmly. The dollar index, which measures the greenback's performance against a basket of major currencies, was up 0.3 percent after having slumped more than 2 percent since Wednesday, when Bernanke assured market participants that the Fed would remain in support mode. It was the steepest fall in four years, normally seen only during financial crises. "There is some argument for suggesting that the shock effect of a dovish Bernanke has largely been digested," said Alan Ruskin, global head of foreign exchange strategy at Deutsche Bank in New York. "Even if he tries to avoid changing his tone, any policy surprises are more likely to be in a positive dollar direction than the reverse," he said. A preliminary reading on the Thomson Reuters/University of Michigan's consumer sentiment index for July was slightly weaker than expected, causing the dollar briefly to pare gains. U.S. Treasuries prices fell as profit-taking halted a rebound in the bond market after Bernanke's remarks calmed fears that the central bank might raise interest rates sooner than some had thought. Traders who were still stuck with soured bets in the recent bond market rout also got rid of those positions before the weekend, analysts said. Benchmark 10-year Treasury notes last traded down 7/32, the yield at 2.5972 percent. GOLD EASES, OIL CLIMBS Commodity markets have had a strong run this week as talk of continued central bank support has bolstered hopes of a pickup in global growth. Spot gold was trading down 0.4 percent at $1,279.80 on ounce, having cut some losses. Bullion was on course for its biggest weekly gain in nearly two years on easing fears of an early end to central bank stimulus. Oil prices gained, led by the biggest surge in gasoline futures this year as a string of refinery outages stoked concerns about fuel supplies. Brent oil extended gains and was at session highs in afternoon trading. Brent climbed $1.08 to settle at $108.81 while U.S. crude oil rose $1.04 to settle at $105.95 a barrel. PORTUGAL TENSIONS Portuguese government bonds fell again after Lisbon requested a delay in the next review of a bailout program due to the country's political crisis. Tensions were reignited this week after Portugal's president threw out plans that seemed to have patched up a government rift and instead demanded some kind of grand coalition, which would include opposition Socialists, who have been calling for snap elections.