* World equities stabilize, solid company results help
* Greek, U.S. debt woes weigh; European yields rise
* China warns on inflation dangers, forex reserves
* Gold hits record high; oil falls
(Updates market action, adds fresh quote)
By Richard Leong
NEW YORK, April 19 (Reuters) - World stocks rose on Tuesday, recouping the prior day's losses, but nagging debt worries both sides of the Atlantic and new signals of inflation dangers in China curbed risk appetite.
A weaker dollar propelled gold
Investors dipped their toes back into stocks and other risk assets in part on solid company results, a day after Standard & Poor's jolted sentiment when it warned political gridlock in Washington is impeding work to pare the federal debt load.
Speculation about Greek debt restructuring as early as this summer has also crimped investor sentiment.
"We are getting a tug-of-war between the macros and micros. We are in the middle of the earnings season with these macro shocks," said Brett Hryb, senior portfolio manager at Manulife Asset Management in Toronto.
Wall Street stocks <.DJI> <.SPX> <.IXIC> clung to modest
gains in early afternoon trading after Goldman Sachs
European stocks <.FTEU3> climbed 0.42 percent, recovering
from Monday's 2 percent drop after above-consensus results from
luxury goods makers LVMH
Japan's Nikkei <.N225> closed down nearly 1.3 percent in the wake of the prior day's losses in the U.S. and Europe.
Investor unease persisted over a possible Greek debt restructure that could further strain the euro zone.
Greece sold 1.6 billion euros of three-month debt, but was forced to pay a yield of more than 4 percent, more than quadruple what Germany pays on similar obligations.
DOLLAR FALLS
Debt rating agency Standard & Poor's rattled investor confidence on Monday when it changed its outlook on the United States to negative from stable, threatening the future of its prized AAA credit rating.
The dollar slipped 0.5 percent against a basket of major currencies <.DXY> after making headway on Monday. Its gains on Monday were due to a rush for safe havens despite the risk of S&P downgrading U.S. debt in two years if Washington fails to achieve a budget plan that relies less on debt.
S&P's warning intensified scrutiny of the huge U.S. budget deficit and the political fight to slash it. The deficit is a key element in the global imbalances that currently worry many investors and policymakers.
There was no direct reaction to the S&P move on Tuesday from Beijing, which holds vast reserves of U.S. Treasuries. However, the head of China's central bank said the country should diversify investments as its some $3 trillion of foreign exchange holdings had grown too large.
Another Chinese rate setter said inflation pressures gave further scope for a rise in banks' reserve requirements following seven hikes -- together with four increases in benchmark interest rates -- since last October.
The euro recovered somewhat from the previous day's sell-off, as the region's debt problems remained in focus.
The single currency notched up to $1.4316
Worries over the cost to bailout peripheral countries
exerted pressure on the European debt market, lagging U.S.
Treasuries. Ten-year Greek bond yields
Benchmark U.S. 10-year note yield
(Additional reporting by Rodrigo Campos, Wanfeng Zhou, Chris Reese, Robert Gibbons and Frank Tang in New York, Editing by Chizu Nomiyama)