(Updates with afternoon trading)

* Trump agenda suffers blow after healthcare bill collapse

* Dollar slips, YTD losses over 7 pct; U.S. yields slide

* Mixed earnings weigh on U.S., European stock markets

* Oil prices climb on higher demand

By Lewis Krauskopf

NEW YORK, July 18 (Reuters) - The dollar stumbled on Tuesday and U.S. Treasury yields fell on a fresh setback to U.S. President Donald Trump's domestic agenda, while U.S. and European stock indexes struggled after a heavy batch of earnings reports.

The collapse of his fellow Republicans' push to repeal and replace Obamacare with their own healthcare bill in the U.S. Senate again raised doubts in financial markets about Trump's ability to enact tax cuts and infrastructure spending.

The dollar fell 0.51 percent against a basket of key currencies, setting a 10-month low and extending its 2017 decline to more than 7 percent.

"It pushes out the rest of the agenda. It’s hard to do a tax reform in the style that it was campaigned on," said Art Hogan, chief market strategist at Wunderlich Securities in New York. "The healthcare hurdle pushes everything in Trump’s agenda to 2018."

The Dow Jones Industrial Average fell 85.09 points, or 0.39 percent, to 21,544.63, the S&P 500 lost 2.32 points, or 0.09 percent, to 2,456.82.

The Nasdaq Composite added 11.05 points, or 0.18 percent, to 6,325.48.

Netflix shares soared after the streaming television company's strong customer growth, boosting the Nasdaq.

Shares of Goldman Sachs and Bank of America fell after those banks' respective quarterly reports, and weighed on bank indexes in the United States and Europe .

Harley-Davidson shares tumbled after the motorcycle maker's weak forecast.

In Europe, the pan-European FTSEurofirst 300 index lost 1.11 percent. Sweden's Ericsson and fashion retailer Zalando plummeted after their respective reports.

MSCI's gauge of stocks across the globe shed 0.08 percent after touching an all-time high on Monday.

In currencies, the euro was up 0.71 percent to $1.1559 against the dollar, and hit its strongest level against the U.S. currency since May 2016.

"The setback for Trump is a setback for the U.S. dollar," said Kathy Lien, managing director at BK Asset Management in New York. "I think that really casts doubt on the Trump administration's broader strategies."

Aside from the Trump agenda setback, there are increasing doubts about further near-term rate hikes by the Federal Reserve.

Expectations for the Fed hiking interest rates this year have been pushed back to the fourth quarter, the latest Reuters poll of economists showed. A poll conducted last month predicted the Fed would raise rates by September.