* World stocks flirt with 10th day of gains

* Wall Street set for poor start

* European shares down 0.4 percent, Japan up 1.7 percent

* Dollar rally falters, euro higher

By Jeremy Gaunt, European Investment Correspondent

LONDON, Jan 7 (Reuters) - World stocks worked on their 10th consecutive session of gains on Wednesday, but European shares were breaking their winning streak and Wall Street looked set for a poor start.

The dollar's recent drive upwards faltered.

Investor sentiment has been boosted recently by the promise of a massive U.S. government spending and tax cut plan from President-elect Barack Obama to stimulate the world's largest economy.