GLOBAL MARKETS-Stocks set for best week in 6 years, dollar climbs

(Adds oil, gold settlement prices)

* Indictment over alleged Russian election meddling cools market

* Stocks continue week's big rally

* Euro zone, Treasury bond yields fall

* Crude rises on equity rebound and weak dollar

By Herbert Lash

NEW YORK, Feb 16 (Reuters) - The dollar edged higher and global stocks rose on Friday, on track for their best week in six years on strong corporate earnings, but a U.S. indictment over alleged Russian meddling in the 2016 presidential election cooled gains on Wall Street.

The 37-page indictment of a Russian Internet agency filed by Special Counsel Robert Mueller described a conspiracy with the aim of supporting then-businessman Donald Trump and sow discord in the U.S. political system.

Wall Street turned south on news of the indictment but later rebounded as the fundamental story has not changed, said Ben Phillips, chief investment officer of EventShares.

Analysts continue to underestimate the pace of global growth, which has led more companies to meet or beat analysts' earnings expectations than in any quarter in 20 years, according to calculations earlier this week by Credit Suisse (IOB: 0QP5.IL - news) .

Fourth-quarter results for European companies in the STOXX 600 index are expected to increase 14.6 percent from a year ago, while the blended earnings growth estimate for the S&P 500 is 15 percent, Thomson Reuters I/B/E/S data show.

"Investors are getting comfortable with the idea that growth is sufficient enough to withstand the expected rate increases that we're going to get as well the increases in inflation that we've seen," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

MSCI (Frankfurt: 3HM.F - news) 's index of stock markets across the globe gained 0.35 percent, while the pan-European FTSEurofirst 300 index of leading regional shares rose 1.11 percent to 1,491.71.

On Wall Street, The Dow Jones Industrial Average rose 97.72 points, or 0.39 percent, to 25,298.09. The S&P 500 gained 9.51 points, or 0.35 percent, to 2,740.71 and the Nasdaq Composite added 2.49 points, or 0.03 percent, to 7,258.92.

A 4.5-percent gain since Monday by MSCI's all-country world index and Nasdaq (Frankfurt: 813516 - news) 's 6-percent gain since then have both indexes on course for their strongest week since December 2011.

Investors are trying to determine whether the market is in an overdue correction or the beginning of something worse, Arone said.

"It looks like this week they're comfortable about uncertainty and the risks that are associated with it, and stocks are moving higher based on fundamentals," he said.

U.S. Treasury prices rose as investors bought back bonds after a sell-off earlier in the week as investor jitters over rising inflation raised the possibility the Federal Reserve may hike interest rates at a faster pace than expected this year.

Borrowing costs across the euro area fell, though the prospect of higher inflation and a move toward tighter monetary policy from major central banks weighed on sentiment across world bond markets.

Short-dated bond yields in Germany, the euro zone's benchmark bond issuer, have risen by about 7 basis points this week and are set for their biggest weekly rise in eight weeks.

Benchmark 10-year U.S. Treasury notes rose 4/32 in price to push their yield down to 2.8768 percent.

The dollar rose on the day but remained on track to post its biggest weekly loss in nine months as negative sentiment offset any support the greenback had from higher Treasury yields.

The dollar index, tracking it against a basket of major currencies, rose 0.61 percent, with the euro down 0.77 percent to $1.2409. The Japanese yen weakened 0.22 percent versus the greenback at 106.37 per dollar.

Oil prices rose, as the rebound in the global equities market and the dollar's recent weakness supported their recovery from last week's slide.

U.S. West Texas Intermediate crude for March delivery rose 34 cents to settle at $61.68 a barrel. Brent rose settled up 51 cents at $64.84.

U.S. April gold futures settled up $0.9, or 0.1 percent, at $1,356.20 per ounce.

(Reporting by Herbert Lash; Editing by Bernadette Baum and Nick Zieminski)