* Netflix, eBay jump after quarterly results
* Dollar gains ground against major currencies
* Dow up 0.4 pct, S&P up 0.4 pct, Nasdaq up 0.3 pct (Updates to midday trade, changes byline)
By Angela Moon
NEW YORK, Oct 21 (Reuters) - Strong corporate earnings kept Wall Street higher for a second day on Thursday, but the major U.S. stock indexes trimmed earlier gains as the dollar started to gain ground.
Blue chips McDonald's Corp and Travelers Cos Inc helped lift the Dow after reporting better-than-expected results, while eBay Inc, Netflix Inc and Amazon.com buoyed both the consumer sector and the Nasdaq Composite.
The euro, which rose against the dollar earlier, briefly lost gains in midday trade. The euro and the popularly traded S&P E-mini futures contract have tracked each other closely in the last month. In the last 22 sessions, they have had a positive correlation coefficient of 0.89, implying a very strong relationship between the two.
"If you're going to trade the U.S. equity market, you have to have a very strong opinion on what the euro is going to do," said Marshall Gause, CEO and chief investment officer at asset management firm Geneva Funds Partners in Denver.
This action helps explain why the markets can seemingly slough off the decline of Caterpillar, which is down even though it reported strong results. The stock is down 1.7 percent at $78.54, but the industrial sector is not following suit. The S&P 500 industrial sector index was up 0.6 percent.
The Dow Jones industrial average gained 49.04 points, or 0.44 percent, at 11,157.01. The Standard & Poor's 500 Index was up 4.41 points, or 0.37 percent, at 1,182.58. The Nasdaq Composite Index rose 7.16 points, or 0.29 percent, at 2,464.55.
Calming fears after recent monetary tightening, data showed economic growth in China slowed in the third quarter, but was still at a healthy level.
Online auctioneer eBay rose 8.9 percent to $27.94. Netflix, the movie rental and streaming service, jumped 12.1 percent to $171.69 after both reported upbeat results late Wednesday.
Amazon advanced 3.3 percent to $163.96 after it was upgraded to a "buy" rating by Bank of America Merrill. It is expected to post results after the closing bell.
McDonald's gained 1.8 percent to $78.81 after it beat expectations for quarterly profit and same-store sales growth in September.
Travelers' shares gained 0.8 percent to $55.10 after the largest publicly traded U.S. property casualty insurer easily beat estimates as premiums rose in its personal insurance lines.
On the downside, Bank of America fell 2.7 percent to $11.43 as investors remained concerned over mortgage foreclosure issues.
On the economic front, new claims for unemployment benefits fell more than expected last week. The Conference Board also said an index of future U.S. economic activity posted a third successive increase in September, but at a pace so modest that it implied only lackluster growth ahead. (Reporting by Angela Moon; Editing by Jan Paschal)