* Hong Kong-listed Chinese shares rise 5.7 pct on reform agenda
* European stocks rally after early stumble, Wall Street jumps, stalls
* China reforms help growth currencies; dollar, yen fall
U.S. stock indices scaled record highs on the prospect of continued Federal Reserve stimulus before mostly retreating on Monday, undermined by a slide in Apple Inc., while bold economic reform plans in China pushed the dollar lower.
The Dow and S&P 500 surged past the 16,000 and 1,800 milestones, respectively, though the S&P pushed lower after activist investor Carl Icahn told Reuters he was cautious about stocks and that the market easily could have a big drop.
Share buybacks are driving results, not profitability, said Icahn, who is urging Apple to repurchase $150 billion of its stock. He also said he still believes the stock is undervalued.
"Very simplistically put, a lot of the earnings are a mirage," Icahn told Reuters Global Investment Outlook Summit. "They are not coming because the companies are well run but because of low interest rates," he said.
The comments reinforced a view that the market's rally to record highs this year is getting a substantial lift from companies issuing debt to buy back stock by tapping historically low interest rates and not from earnings growth.
Apple shares slid 1.26 percent to $518.65, the biggest drag on the Nasdaq, while shares of Facebook Inc. and Microsoft Corp. were the next biggest drags. The Dow has set record closing highs for four straight sessions.
"Apple's been under pressure since its last earnings report," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "Apple's the biggest tech stock by valuation and when it can't get going, it weighs over from a sentiment standpoint on a lot of other things."
Earlier on Monday, Chinese shares listed in Hong Kong posted their biggest gain in nearly two years, driving the safe-haven dollar and Japanese yen lower after China announced its most sweeping economic and social reforms in nearly three decades.
The reform plans boosted investor appetite for higher-yielding currencies such as the Australian and New Zealand dollars. The growth-linked currencies outperformed as a flood of global liquidity and promises to keep interest rates low continue to weigh on the low-yielding U.S. dollar and the yen.
The China Enterprises Index of the top Chinese listings in Hong Kong soared 5.7 percent for its biggest daily gain since Dec. 1, 2011.
Germany's DAX index finished at a all-time closing high of 9,225.43 as European shares resumed their rally on an improving outlook for the euro zone economy.
Low inflation and interest rates are favorable for stocks, "with just enough economic growth to allow for some modest earnings growth," said David Joy, chief market strategist at Ameriprise Financial. But he added that there is reason to be cautious.
U.S. large-cap stocks are trading at 15.3 times expected earnings, with the 45-year average at 14.8, Thomson Reuters data shows.
MSCI's all-country world stock index rose 0.29 percent, while the pan-European FTSEurofirst 300 index rose 0.49 percent to close at 1,304.25.
The Dow Jones industrial average closed up 14.32 points, or 0.09 percent, at 15,976.02. The Standard & Poor's 500 Index ended down 6.65 points, or 0.37 percent, at 1,791.53. The Nasdaq Composite Index was down 36.90 points, or 0.93 percent, at 3,949.07.
Gold fell as a rebound in equities and lackluster physical demand prompted traders to cash in three days' of gains, though expectations that the Fed's policy will stay loose lent support.
Gold for December delivery settled down 1.2 percent at $1,272.3 an ounce.
U.S. Treasury debt prices rose, supported by the prospect of the Fed's continued "easy" monetary policy. The benchmark 10-year Treasury note was up 11/32, its yield at 2.6657 percent.
The dollar index, a measure of the greenback against a basket of currencies, slipped 0.2 percent to 80.728.
The euro drew some support after data showed the euro zone's trade surplus grew more than expected in September. The euro was up 0.1 percent at 1.3508.
Brent crude oil fell toward $108 a barrel after a week of sharp gains ahead of talks between Iran and the West that could lead to an increase in Iranian crude oil exports. U.S. oil futures fell more than $1 per barrel on the view that supplies were ample.
January Brent crude settled down 3 cents at $108.47 a barrel, while U.S. crude for December delivery fell 81 cents to settle at $93.03 a barrel.
Bund futures settled up 23 ticks at 141.85, while 10-year German yields fell to 1.68 percent.
Germany's ZEW business sentiment indicator on Tuesday and the minutes from the Federal Reserve's October policy meeting on Wednesday may provide hints to future monetary policy moves.