Financial markets juggled with competing drivers on Tuesday as investors generally boosted stocks in the hope of more good earnings reports and the dollar slipped on concerns about the U.S. economy.

Key earnings from Goldman Sachs and Apple lay ahead but there was growing concern about the U.S. economy after the NAHB/Wells Fargo Housing Market index fell more than expected in July after a popular tax credit for homebuyers expired in April.

That underlined fears about the recovery ahead of housing data including housing starts on Tuesday, pushing the euro to a two-month high against the dollar.

Investors were also eyeing the Bank of Canada, which was expected to raise interest rates later in the day for the second time in two months.

World stocks as measured by MSCI <.MIWD00000PUS> were up 0.1 percent with the emerging market benchmark gaining 0.6 percent. The Thomson Reuters global stock index <.TRXFLDGLPU> was up 0.2 percent.

European stocks were breaking a four-day losing streak with the pan-European FTSEurofirst 300 <.FTEU3> up 0.1 percent.

Investors will monitor results from Goldman to gauge the health of the banking industry after peers Bank of America , JPMorgan and Citigroup beat analysts forecast on earnings last week but posted disappointing revenues.

The market will look for guidance (from companies) for Q3 and to see how that is going and will be sensitive to any expressions of confidence or the lack of it, said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

Japan's benchmark Nikkei stock index <.N225> shed 1.2 percent, reflecting investor concern about a U.S. slowdown.

EURO STRONG

The euro rose to as high as $1.3029 on trading platform EBS, and was later up 0.2 percent on the day at $1.2972.

Sentiment toward the euro is quite positive, said Lutz Karpowitz, senior currency strategist at Commerzbank in Frankfurt.

The short-term sovereign debt problems seem to be under control, and data out of the U.S. is weighing on the dollar.

Results of euro zone bank stress tests due out on Friday are expected to soothe market concerns about the banking system, even though some banks are not expected to pass the test.

Euro zone government bonds were steady. Ireland was due to sell up to 1.5 billion euros of bonds a day after the country's credit rating was cut by rating agency Moody's.

(Additional reporting by Tamawa Desai and Harpreet Bhal; Editing by Susan Fenton)

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