(Adds dropped word 'be' in quote in 5th paragraph)
* Investors await Trump's State of the Union speech
* Global MSCI stock index gains for 6th session
* Swiss franc sinks to 11-week lows
* U.S. yields retreat, tracking Fed rate outlook
By Lewis Krauskopf
NEW YORK, Feb 5 (Reuters) - World stocks rose to a fresh two-month high on Tuesday to keep up their fast start to 2019 while the U.S. dollar strengthened for a fourth straight session as investors looked toward an annual address by the U.S. president later in the evening.
Boosted by U.S. and European equity performance, MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.64 percent, increasing for a sixth straight session as it hit a two-month high.
President Donald Trump was due to give his State of the Union speech at 2100 ET (0200 GMT), with investors awaiting indications of progress in U.S.-China trade talks and watching for signs of tensions with Democrats following a 35-day partial federal government shutdown. Federal Reserve's dovish recent statement on interest rate policy, along with optimism over U.S.-China tensions, has fueled recent risk appetite, even as estimates for U.S. corporate earnings have been falling.
"We could move significantly higher if the geopolitical environment improves, and we could also decline if things break down," said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. "There will be lots of hints tonight about the U.S. political landscape."
On Wall Street, the Dow Jones Industrial Average .DJI rose 172.15 points, or 0.68 percent, to 25,411.52, the S&P 500 .SPX gained 12.83 points, or 0.47 percent, to 2,737.7 and the Nasdaq Composite .IXIC added 54.55 points, or 0.74 percent, to 7,402.08.
Shares of Estée Lauder Cos EL.N and Ralph Lauren (NYSE:RL) RL.N reacted favorably to the companies' respective quarterly reports. main focus of the market has just been that people are getting more comfortable that the prices for stocks are reasonable,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
Fourth-quarter earnings for companies on the benchmark S&P 500 index were on track to have climbed 15.8 percent, but profit in the first quarter is now expected to rise by only 0.4 percent, according to IBES data from Refinitiv.
The pan-European STOXX 600 index .STOXX rose 1.41 percent, helped by a recovery in banks and a solid update from BP BP.L . dollar index .DXY , which measures the greenback against a basket of currencies, rose 0.21 percent, up for a fourth straight session, with the euro EUR= down 0.23 percent to $1.1409. recovery in investors' appetite for risk taking exerted pressure on safe-haven currencies, dragging the Swiss franc to an 11-week low against the dollar CHF= .
U.S. Treasury yields fell as investors priced in the Fed's dovish interest rate outlook amid an uncertain global economic outlook. are consolidating around levels that are more consistent with the new position at the Fed," that it could effectively hold rates steady over the next six months, said John Herrmann, rates strategist at MUFG Securities in New York.
Benchmark U.S. 10-year Treasury notes US10YT=RR last rose 7/32 in price to yield 2.7001 percent, from 2.724 percent late Monday.
Oil prices pulled back from two-month highs as concerns over a global economic slowdown crept back into the market and a stronger dollar also weighed. crude CLcv1 settled down 1.7 percent at $53.66 a barrel, while Brent LCOcv1 settled at $61.98 a barrel, down 0.9 percent.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Gains for major world stock markets since the start of the year
https://tmsnrt.rs/2Bjz7kf Graphic: World FX rates in 2019
http://tmsnrt.rs/2egbfVh
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