* Euro tumbles on ECB decision to rein in bond purchases
* Treasury yields turn higher; U.S. House clears way for tax bill
* Wall St advances on earnings but healthcare lags (Updates to European stock market close, adds commentary)
By Stephanie Kelly
NEW YORK, Oct 26 (Reuters) - The euro fell against the U.S. dollar on Thursday after the European Central Bank began weaning the euro zone off loose monetary policy, while U.S. Treasury yields rebounded when the U.S. House passed a budget plan that paves a path for tax cuts.
The dollar index rose 0.97 percent, with the euro down 1.32 percent to $1.1656, after the ECB said it would cut its bond purchases in half to 30 billion euros a month from January. However, it hedged its bets by extending asset purchases by nine months given continuously low inflation.
"With Draghi's openness to QE, it's a victory for the doves," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York.
Benchmark 10-year U.S. Treasury notes last fell 3/32 in price to yield 2.4536 percent, from 2.444 percent late on Wednesday.
The 30-year bond last fell 4/32 in price to yield 2.9608 percent, from 2.955 percent late on Wednesday.
The yields had slipped earlier in the day, in line with euro zone bonds, after the ECB's meeting. However, they recovered after the U.S. House passed a fiscal year 2018 budget, enabling tax legislation to win congressional approval without any Democratic votes.
The legislation is expected to be made public next week.
"If you do have something on the tax issue happen this year, that would be good for growth, it would be good for profits, it would be good for the equity side," said Sameer Samana, a global quantitative and technical strategist at Wells Fargo Investment Institute in St. Louis. "It would be one more reason to at least rethink fixed income holdings."
Gold dipped as the dollar gained against the euro after the ECB decision to trim bond purchases and as it hedged that move by also extending the lifespan of its bond-buying program.
Spot gold dropped 0.7 percent to $1,268.25 an ounce.
On Wall Street, all three major indexes gained, boosted by upbeat corporate results on one of the busiest days of third-quarter earnings. Seventy-four percent of 231 S&P companies have beat profit expectations as of Thursday.
The Dow Jones Industrial Average rose 87.08 points, or 0.37 percent, to 23,416.54, the S&P 500 gained 5.06 points, or 0.20 percent, to 2,562.21 and the Nasdaq Composite added 1.98 points, or 0.03 percent, to 6,565.87.
Ford Motor Co reported a better-than-expected quarterly net profit, driven largely by U.S. sales of its high-margin pickup trucks, and said it would begin to test self-driving cars in some cities next year. The company's shares were up 1.45 percent.
Twitter's shares rose 19.0 percent. The social network company said it could turn its first ever profit in the fourth quarter, after making cost cuts and finding new revenue sources.
Nike and holding company DowDuPont both lifted the Dow, with shares up 3.5 percent and 3.2 percent, respectively.
However, Celgene shares, which dropped 20.0 percent, dragged on the S&P 500 and the Nasdaq Composite after the biopharmaceutical company reported disappointing sales for its psoriasis treatment drug Otezla.
European equities were boosted by the weaker euro after the ECB's meeting. The pan-European FTSEurofirst 300 index closed up 1.07 percent.
Japan's Nikkei rose 0.15 percent.
Oil prices were little changed after erasing earlier losses. Middle East tensions and Saudi comments about ending a global supply glut offset an unexpected increase in U.S. crude inventories and high U.S. production and exports.
U.S. crude rose 0.9 percent to $52.65 per barrel and Brent was last at $59.32, up 1.51 percent on the day.
Additional reporting by David Ingram in San Francisco, Pushkala A and Sruthi Shankar in Bengaluru, Nick Carey and Paul Lienert in Detroit; Richard Leong in New York; Abhinav Ramnarayan, Fanny Potkin in London; Editing by Daniel Bases and Nick Zieminski