* U.S. stocks higher in late-morning New York trading
* Investors see growing likelihood of delay in UK leaving EU
* Sterling firm against dollar (Updates with early U.S. markets activity, changes byline, dateline, previous LONDON)
By Caroline Valetkevitch
NEW YORK, Jan 16 (Reuters) - Major world stock indexes rose on Wednesday, with the S&P 500 supported by gains in U.S. bank stocks after strong earnings, while the pound edged up ahead of a no-confidence vote in British Prime Minister Theresa May's government.
Investors saw potential for legislative deadlock forcing London to delay its departure from the European Union following the parliamentary defeat of May's Brexit deal late Tuesday. The no confidence vote is expected at 1900 GMT.
May is expected to survive the vote, sponsored by the main opposition Labour Party. Expectations of a softer Brexit - perhaps incorporating the Labour Party's idea of membership of a permanent customs union - gave support to the pound.
Sterling was last trading at $1.2868, up 0.08 percent on the day.
Stocks had mostly priced in the Brexit vote's defeat and were trading higher. The pan-European STOXX 600 index rose 0.52 percent and MSCI's gauge of stocks across the globe gained 0.28 percent.
On Wall Street, strong earnings from Bank of America and Goldman Sachs as well as a multibillion-dollar deal in the fintech sector kept stocks in positive territory.
"The fact that JPMorgan and Citi laid the groundwork for bank earnings not being as bad as markets thought made it easier for Goldman and Bank of America," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.
The Dow Jones Industrial Average rose 149.65 points, or 0.62 percent, to 24,215.24, the S&P 500 gained 10.4 points, or 0.40 percent, to 2,620.7 and the Nasdaq Composite added 33.52 points, or 0.48 percent, to 7,057.35.
The dollar rose against the euro as the euro zone single currency was pushed lower by worries about the zone's economy, with the euro down 0.11 percent to $1.1402.
Earlier this week, data showed Germany barely escaped a recession in the second half of 2018 and European Central Bank chief Mario Draghi warned on Tuesday the euro zone economy was weaker than anticipated.
In sovereign debt markets, British government bonds underperformed versus German peers in early trade.
U.S. Treasury yields rose as stronger-than-forecast results from two major banks lifted Wall Street, reducing safe-haven demand for U.S. government debt.
Benchmark 10-year notes last fell 6/32 in price to yield 2.7272 percent, from 2.708 percent late on Tuesday.
Oil prices eased after climbing about 3 percent in the previous session, with worries about the global economy and forecasts of swelling U.S. production hurting sentiment.
Brent crude futures were last down 19 cents or 0.31 percent at $60.45 a barrel.
U.S. crude was last down 35 cents, or 0.67 percent, at $51.76 per barrel.
For Reuters Live Markets blog on European and UK stock markets, please click on:
Additional reporting by Tom Wilson in London and Medha Singh in Bengaluru Editing by Mark Heinrich and James Dalgleish