* S&P 500 at five-month peak as earnings roll in
* Markets digest second day of testimony form Fed's Powell
* Tech lifts European shares as currency weakens
* Oil up on bullish demand signals, even as U.S. stockpiles grow (Updates with afternoon U.S. trading)
By Lewis Krauskopf
NEW YORK, July 18 (Reuters) - A gauge of global stocks hit a one-month high on Wednesday as Wall Street and European markets churned higher after a raft of strong corporate earnings, while the U.S. dollar hit a three-week high against a basket of major currencies.
Oil prices rose, reversing earlier losses, on bullish demand signals. Gold slumped to a year low before rebounding.
Markets also responded to a second day of congressional testimony from U.S. Federal Reserve Chairman Jerome Powell, whose upbeat remarks about the economy on Tuesday bolstered the dollar. Powell repeated on Wednesday that rising world protectionism would over time pose a risk to a U.S. and global expansion that currently appears largely on track to continue.
“Strengthening economic growth and a confident Fed is helping to support the dollar,” said Alan Gayle, president of Via Nova Investment Management LLC in Fredericksburg, Virginia. "Higher short-term interest rates make the dollar more attractive relative to other currencies."
On Wall Street, the Dow Jones Industrial Average rose 70.11 points, or 0.28 percent, to 25,190, the S&P 500 gained 4.42 points, or 0.16 percent, to 2,813.97, and the Nasdaq Composite dropped 1.74 points, or 0.02 percent, to 7,853.38.
The S&P 500 hit a more than five-month high.
Shares of Morgan Stanley, airline United Continental and railroad CSX all jumped after the companies reported better-than-expected results.
Amazon.com Inc's stock market value reached $900 billion for the first time, though the shares later reversed course to trade slightly lower.
The pan-European FTSEurofirst 300 index rose 0.60 percent, hitting a one-month high. The region's shares were supported by currency weakness and a rally in tech stocks following well-received earnings updates, including from Sweden's Ericsson.
MSCI's gauge of stocks across the globe gained 0.15 percent and touched its highest point in a month.
In the foreign exchange market, the dollar index, which measures the greenback against a basket of six currencies, rose 0.15 percent, to 95.087, after rising as high 95.407. The euro was down 0.12 percent to $1.1645.
Benchmark U.S. 10-year notes last fell 3/32 in price to yield 2.871 percent, from 2.862 percent late on Tuesday. The U.S. yield curve remained near its flattest in nearly 11 years.
Oil prices rose after U.S. government data indicated bullish demand for gasoline and distillates, which overshadowed a surprise build in U.S. crude inventories and U.S. crude oil production's hitting 11 million barrels per day for the first time.
U.S. crude rose 0.75 percent to $68.59 per barrel, and Brent was last at $72.91, up 1.04 percent.
Spot gold was little changed at $1,227.52 an ounce, after earlier sinking to its lowest point in a year.
Reporting by Lewis Krauskopf Additional reporting by Eric Onstad in London Editing by Bernadette Baum and Leslie Adler