* September U.S. interest rate 'lift-off' back on table
* Oil hits multi-month lows on U.S. gasoline build worries
* Dollar teeters on rate-hike view (Adds oil settlement prices)
By Herbert Lash
NEW YORK, Aug 5 (Reuters) - Stocks rose on Wednesday, lifted by data showing the pace of growth in the U.S. service sector surged in July to its best level in a decade and solid corporate results in Europe, while the dollar teetered as investors weighed the possibility of a September rate hike.
The U.S. Institute for Supply Management's services sector index rose to 60.3, its highest reading since August 2005, on sharp increases in business activity, employment and new orders. It beat expectations of a 56.2 reading. ID:nN9N10A00G
The data backed views the Federal Reserve will raise interest rates in September after weaker-than-expected private hiring figures for July released earlier on Wednesday kindled doubts about a rate hike next month. ID:nZON1YIM00
"For most people watching the market, whether it's September or December isn't that critical, most people are assuming it will happen this year. They've already factored that in to the way they look at the market," said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
The dollar was supported by comments from Atlanta Federal Reserve President Dennis Lockhart, regarded as a centrist policymaker, who put September back on the table for the first U.S. rate rise in almost a decade in an interview on Tuesday .
Lockhart told The Wall Street Journal it would take "significant deterioration" in the U.S. economy for him to not support a rate hike next month.
Against the yen JPY= , the greenback rose to a two-month high, gaining 0.33 percent to 124.79. The U.S. dollar index .DXY slipped 0.06 percent at 97.876.
In equity markets, the Dow Jones industrial average .DJI rose 15.2 points, or 0.09 percent, to 17,565.89. The S&P 500 .SPX gained 10.14 points, or 0.48 percent, to 2,103.46 and the Nasdaq Composite .IXIC added 46.37 points, or 0.91 percent, to 5,151.91.
Stocks gained more than 1.0 percent in Europe, with the pan-European FTSEurofirst 300 index .FTEU3 closing up 1.31 percent at 1,601.66. MSCI's all-country world stock index .MIWD00000PUS rose 0.33 percent.
Societe Generale SOGN.PA shares jumped 7.9 percent after the French bank became the latest major European company to post forecast-beating earnings, while regional automakers, which fell in late July on concerns about a slowing China, rallied. The STOXX Europe index .SXAP of 15 companies rose 2.5 percent.
In debt markets, U.S. Treasuries prices fell, while a sell-off in European bonds accelerated, after the strong ISM report. ECONUS
The benchmark 10-year U.S. Treasury note fell 15/32 in price to yield 2.2645 percent.
German 10-year yields DE10YT=TWEB , the euro zone's benchmark, jumped 12 basis points to 0.75 percent.
Oil prices hit multi-month lows on a surge in U.S. gasoline stockpiles as the summer season, the country's biggest demand period for motor fuels, neared its end.
Futures of Brent, the global oil benchmark, hit a six-month bottom while U.S. crude touched a 4-1/2-month trough, ignoring a bigger-than-expected drawdown in U.S. crude stockpiles announced by the Energy Information Administration.
September Brent crude oil futures LCOc1 fell 40 cents to settle at $49.59 a barrel. U.S. crude for September delivery CLc1 settled down 59 cents at $45.15 a barrel.
(Editing by Larry King and Meredith Mazzilli; To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on http://blogs.reuters.com/hedgehub)