* European shares dip as investors pounce on poor earnings
* Caution on U.S. election holds dollar, yields steady
* Investors expect a split Congress, Democrats to take House
* Oil drops on Iran sanction exemptions (Adds settled oil prices; updates throughout)
By Hilary Russ
NEW YORK, Nov 6 (Reuters) - Stock markets edged up on Tuesday, with trading thin in the United States, while the dollar and Treasury yields held steady as Americans went to the polls in pivotal midterm elections that could shift the balance of power in Congress.
MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.12 percent.
The elections mark the first major test of President Donald Trump's polarizing personality and hardline policies on taxes, trade and immigration. If his Republican party loses control of the House of Representatives or the Senate, Democrats would be able to put the brakes on his agenda. Opinion polls show Democrats have a good chance of winning a majority in the House. the U.S. presidential election or the UK's Brexit referendum, the upcoming U.S. elections are not a binary event," said Yasuo Sakuma, chief investment officer at Libra Investments. "So it's unlikely to send stocks significantly in one direction, apart from initial quick reactions."
European shares slipped on disappointing corporate earnings and caution ahead of the U.S. election results. Politics weighed on Italian stocks, and oil prices fell as investors digested exemptions to the newly restored U.S. sanctions on Iranian oil. .N
The pan-European STOXX 600 index .STOXX lost 0.26 percent.
On Wall Street, the Dow Jones Industrial Average .DJI rose 84.43 points, or 0.33 percent, to 25,546.13, the S&P 500 .SPX gained 4 points, or 0.15 percent, to 2,742.31, and the Nasdaq Composite .IXIC added 5.44 points, or 0.07 percent, to 7,334.30.
"With the Democrats favorites to take control of the House and the Republicans the Senate, the next couple of years may be far more difficult for Trump," said Craig Erlam, a senior market analyst at Oanda in London. "When you consider how markets have done since his election victory – granted, primarily on the back of tax reforms – it's easy to see why this may not be the most investor-friendly result."
The benchmark S&P 500 index has climbed 28 percent since Trump's election in November 2016, more than under any other president in comparable periods in the past 64 years. so much at stake, currency market moves were tight. The dollar hardly moved against the euro EUR= and gained some ground against the yen JPY= .
Sterling GBP=D3 erased earlier losses in volatile trading on growing hopes of a Brexit deal breakthrough after a British Cabinet meeting. dollar index .DXY , which tracks the greenback against a basket of six major currencies, rose 0.02 percent, with the euro EUR= up 0.05 percent to $1.1412.
The Japanese yen weakened 0.19 percent versus the greenback at 113.42 per dollar.
Italian shares .FTMIB were essentially flat, despite frayed nerves in Italy after euro zone finance ministers called on Rome to change its budget to conform with European Union rules at a meeting late on Monday. prices sank, with U.S. crude futures sliding to a seven-month low, as Iran said it has so far been able to sell as much oil as it needs to after Washington granted sanction waivers to top buyers of Iranian oil. crude oil futures CLc1 settled at $62.21 per barrel, down 89 cents, or 1.41 percent. Brent crude futures settled at LCOc1 $72.13, down $1.04 or 1.42 percent.
"The details on the Iran sanctions waivers are trickling out, and it appears much more Iranian oil will remain on the market in the near-term than previously thought," said John Kilduff, a partner at Again Capital Management in New York.
Both oil benchmarks have slid more than 15 percent since hitting four-year highs in early October.
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