GLOBAL MARKETS-Dollar firms after Fed chair's upbeat remarks, stocks gain

* Powell: Years of strong jobs, low inflation still ahead

* J&J helps S&P 500, Dow; MSCI global stock gauge climbs

* Powell upbeat view flattens U.S. yield curve

* Oil steadies on U.S. stockpile forecasts, Venezuela worries (Updates with close of U.S. trading)

By Lewis Krauskopf

NEW YORK, July 17 (Reuters) - The U.S. dollar rose on Tuesday against a basket of major currencies following an upbeat economic assessment from the head of the U.S. Federal Reserve, while world stocks climbed as a heavy week of corporate earnings also kicked into gear.

Wall Street's main indexes erased losses from the start of the session to end solidly positive. The U.S. two-year Treasury yield rose to its highest level in nearly a decade, with the yield curve at its flattest in nearly 11 years.

In testimony, Fed Chairman Jerome Powell said he sees the United States on track for years more of steady growth.

"He reiterated the view of the economy as being strong, growing at a solid pace with recent inflation data as more or less encouraging," said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

Powell was challenged in a congressional hearing by senators worried the Trump administration's trade policies were already damaging businesses. over a global trade dispute have roiled markets over the past few months. But in written testimony to the Senate Banking Committee and in his response to questions about a possible "trade war," Powell largely discounted the risks.

"He basically completely dismissed any concerns about a trade tariff war," said Boris Schlossberg, director of FX strategy at BK Asset Management in New York.

The Dow Jones Industrial Average .DJI rose 55.53 points, or 0.22 percent, to 25,119.89, the S&P 500 .SPX gained 11.12 points, or 0.40 percent, to 2,809.55 and the Nasdaq Composite .IXIC added 49.40 points, or 0.63 percent, to 7,855.12.

As a busy week of corporate earnings began, Netflix Inc NFLX.O shares dropped 5.2 percent after the company's subscriber growth fell short of Wall Street expectations, while Johnson & Johnson (NYSE:JNJ) JNJ.N shares gained 3.5 percent, boosting the S&P 500 and the Dow industrials, after the healthcare company's results topped estimates. pan-European FTSEurofirst 300 index .FTEU3 rose 0.26 percent, helped by Powell's testimony, amid a batch of mixed company updates. gauge of stocks across the globe .MIWD00000PUS gained 0.18 percent.

The dollar index .DXY , tracked against a basket of major currencies, rose 0.47 percent, with the euro EUR= down 0.4 percent to $1.1662. dropped to a four-month low against the euro EURGBP= and a roughly three-week trough versus the dollar GBP= as investors expected more Brexit challenges after Theresa May's government only narrowly won a vote on a trade bill before the British parliament. U.S. 10-year notes US10YT=RR last fell 2/32 in price to yield 2.8637 percent, from 2.856 percent late on Monday.

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The spread between two-year and 10-year Treasury yields US2US10=TWEB hovered at its tightest level since July 2007, as Powell's comments supported traders' views of further rate increases from the U.S. central bank. oil prices steadied after falling steeply on Monday as the focus turned to falling inventories in the United States and further output constraints in Venezuela and Libya. crude CLcv1 settled up 2 cents at $68.08 per barrel and Brent LCOcv1 settled at $72.16, up 32 cents, or 0.45 percent.