* U.S. stocks edge up on Amazon, Microsoft lift
* Dollar hits highest since Jan. 11
* Sterling hits lowest since March 1 as Britain's economy slows (Updates with close of U.S. markets)
By Chuck Mikolajczak
NEW YORK, April 27 (Reuters) - A gauge of world stocks climbed on Friday, lifted by gains in Amazon, as U.S. Treasury yields dipped for a second straight day on global growth skepticism, but investors shrugged off news of progress on a peace deal on the Korean peninsula.
U.S. stocks were little changed, as gains in Amazon , up 3.60 percent, and Microsoft, up 1.66 percent, after their quarterly earnings were offset by a 0.96 percent drop in the energy sector.
Energy was pulled lower by a 3.80 percent drop in Exxon Mobil Corp after the world's largest publicly traded oil producer posted lower-than-expected quarterly results.
The U.S. economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years. But a surge in wages amid a tightening labor market and lower tax rates suggested the setback is temporary.
"The GDP came in much stronger (than expected) but the employment cost index was also stronger and that is what caused some of the negative reaction because that just brings up the whole wage pressure and inflationary argument again, and what the Fed is going to do," said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
The Federal Reserve is scheduled to hold a two-day meeting next week, with an announcement on U.S. monetary policy expected on May 2. Traders currently see only a 6.9 percent chance of a 0.25 percentage point interest rate hike, according to Thomson Reuters data.
The Dow Jones Industrial Average fell 11.15 points, or 0.05 percent, to 24,311.19, the S&P 500 gained 2.97 points, or 0.11 percent, to 2,669.91 and the Nasdaq Composite added 1.12 points, or 0.02 percent, to 7,119.80.
For the week, the Dow lost 0.62 percent, the S&P edged down 0.01 percent and the Nasdaq declined 0.37 percent.
European shares closed Friday's session with a slight advance, lifted by results from Spanish banks and a bounce in technology shares to secure their fifth straight weekly climb.
The pan-European FTSEurofirst 300 index rose 0.24 percent and MSCI's gauge of stocks across the globe gained 0.33 percent.
Yields on benchmark 10-year U.S. Treasury debt fell for a second straight day after hitting a four-year high this week.
Ten-year notes last rose 8/32 in price to yield 2.9605 percent, from 2.99 percent late on Thursday.
But the margin between U.S. shorter-dated Treasury yields and longer-dated ones shrank on investors' skepticism about the global economy even as the United States fared better than other nations in the first quarter.
The dollar held steady, on track for its strongest week since November 2016. The solid week has lifted the currency to its highest since Jan. 11.
The dollar index fell 0.03 percent, with the euro up 0.2 percent to $1.2125.
Sterling slumped to its lowest since March 1 against the dollar. Data showed Britain's economy slowed much more sharply than expected in the first quarter of 2018, slashing market expectations of a Bank of England rate hike in May.
Sterling was last trading at $1.3776, down 0.99 percent on the day.
The South Korean won strengthened after the leaders of North and South Korea pledged to work for the "complete denuclearization" of the Korean peninsula. But U.S. President Donald Trump said he would maintain pressure on Pyongyang ahead of his own meeting with North Korea's Kim Jong Un. Last year North Korea launched intercontinental ballistic missiles on July 4 and 28 and Nov. 29.
"You like the headlines, they look very good. You want that stuff to happen but until you really see it start to happen, the Korea stuff is a wait and see attitude," said Polcari.
The won strengthened 0.89 percent versus the greenback at 1,069.00 per dollar.
Reporting by Chuck Mikolajczak Editing by James Dalgleish and Dan Grebler