* World stocks on track for second weekly fall
* European stocks sluggish as earnings disappoint
* Global earnings momentum fading, SG strategists say
* Dollar falls on subpoena report, Euro rises
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Ritvik Carvalho and Helen Reid
LONDON, Nov 17 (Reuters) - World stocks clawed back more losses on Friday after spending much of the week in the red, helped by signs of progress in U.S. tax reform and strong corporate results, though many hurdles remain to secure passage of a tax cut deal.
The U.S. House of Representatives passed a tax overhaul expected to boost share prices if it becomes law. The legislative battle now shifts to the Senate.
Despite their bounceback, however, global stocks were still on track for a second straight week of losses, their longest losing streak since August.
The MSCI world equity index, which tracks shares in 47 countries was up 0.1 percent on the day, but was heading for a 0.1 percent fall on the week.
European shares were sluggish in early deals after the previous session’s strong recovery, with the STOXX 600 index falling back 0.1 percent as disappointing company results and downgrades weighed.
As earnings season drew to a close with 90 percent of U.S. and European companies having reported, analysts said results were supportive but weaker than in the previous quarters.
“European equity markets are trading in the red this morning and while this is being attributed to downgrades and earnings, I think it’s simply part of a broader move away from risk and a decision to lock in some profits,” said OANDA markets analyst Craig Erlam.
But it has been a bruising week, with global high yield bond markets also on course for a second straight week of losses - for the first time in a year - and Wall Street volatility at its highest in three months. On Friday, however, high yield “junk” bond prices recovered and market volatility also eased.
The U.S. Treasury yield curve remained on investors’ radar, reaching its flattest level in a decade, reflecting a belief that the Federal Reserve will continue to raise interest rates, pushing yields on the short end higher. At the same time, U.S. inflation, although trending higher, will likely remain subdued, limiting yields on longer-dated bonds.
The spread between U.S. 2-year and 10-year yields narrowed 1.6 basis points. It was last at 64.34 basis points.
In Europe, German yields steadied but remained on track for their biggest weekly drop since the European Central Bank’s meeting at the end of October, as the stock market wobble pushed cash towards safe-haven assets.
“The risk asset recovery and a more negative technical picture have put some pressure on bond markets,” Societe Generale strategists wrote, adding, however, that they don’t expect a wider sell-off.
A benign euro zone backdrop did, however, help compress yields on other euro zone debt, with French yield premia over Germany falling this week to the lowest in 2-1/2 year lows.
The euro also enjoyed gains, up 0.2 percent against the dollar at $1.1793. Strong euro zone GDP figures helped the common currency recover fully from its end-October drop when the ECB extended its asset purchase programme.
ECB President Mario Draghi said the central bank’s decision to extend the programme until September 2018 was key in pushing market expectations for the first rate hike further into the future.
Meanwhile the U.S. dollar was dented by a report that Special Counsel Robert Mueller’s team last month subpoenaed President Donald Trump’s campaign for documents containing specified Russian keywords from more than a dozen officials.
The greenback fell 0.2 percent against a basket of six major currencies.
“The dollar’s temporary rally (since September) appears to have ended in early November, and the euro is now receiving broad-based support,” wrote Unicredit analysts in a note.
“Investors have probably increased their focus on good euro zone fundamentals, rewarding the common currency across the board. We agree and anticipate further widespread euro gains.”
Bitcoin was trading down 3.8 percent, at $7,560.
Emerging stocks gained 0.8 percent, helped by the broadly risk-on mood.
Oil prices rose but remained en route for their first week of losses in six, as concerns grew over Russia’s support for an extension of the crude output cuts that have bolstered prices in recent months.
U.S. light crude rose 1.6 percent to $56.03 a barrel, but still within its trading range in the past couple of days. It was down 2.1 percent on the week.
Brent futures hit a two-week low of $62.08 a barrel but last stood 1.2 percent higher at $62.10.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Reporting by Ritvik Carvalho and Helen Reid, additional Reporting by Jamie McGeever and Sujata Rao; Editing by Gareth Jones