* Dollar gains as data backs expected rate hike
* Crude oil eases as focus returns to oversupply
* Retail earnings lift Wall St; European shares rise
* Copper struggles at 6-year lows on China demand woes (Adds U.S. market openings; changes dateline from LONDON)
By Lewis Krauskopf
NEW YORK, Nov 17 (Reuters) - Shares in major markets rallied on Tuesday, fueled by strong corporate reports in the United States and Europe, while the U.S. dollar and Treasury yields rose as firming inflation backed expectations of an impending interest rate hike.
Better-than-expected results from retailers Home Depot (N:HD) HD.N and Wal-Mart Stores (N:WMT) WMT.N pushed the S&P 500 index higher, shoring up some confidence in the sector after weak economic data and earnings last week sparked concerns about slowing retail spending. urn:newsml:reuters.com:*:nL3N13C4JL
"People understand that the U.S. consumer is okay, but not great," said Steve Blitz, chief economist at ITG. "What we're seeing with the consumer is that there's a limited wallet. If you see increased spending one place, you see decreased spending in another place."
The Dow Jones industrial average .DJI rose 86.06 points, or 0.49 percent, to 17,569.07, the S&P 500 .SPX gained 9.85 points, or 0.48 percent, to 2,063.04 and the Nasdaq Composite .IXIC added 30.61 points, or 0.61 percent, to 5,015.22.
In Europe, the FTSEurofirst 300 index .FTEU3 increased 2.3 percent, as Germany's United Internet UTDI.DE and Dutch-based Randstad RAND.AS , the world's second-biggest staffing company, posted encouraging results. urn:newsml:reuters.com:*:nL8N13C3TQ
MSCI's all-country world index .MIWD00000PUS rose 1 percent.
"Investors are showing resilience to the recent attacks in Paris despite mounting worries over security in Europe," said B Capital Wealth Management Managing Director Lorne Baring, in London.
Greek stocks surged and bond yields hit their lowest in more than a year after the country's finance minister said Athens had reached an agreement with its lenders on financial reforms. urn:newsml:reuters.com:*:nL8N13C2C9
Data on Tuesday showed U.S. consumer prices increased in October after two straight months of declines, a sign of firming inflation that supported expectations the Federal Reserve will raise interest rates next month. urn:newsml:reuters.com:*:nL1N13C0UU
Benchmark 10-year Treasuries US10YT=RR were down 9/32 in price with a yield of 2.3045 percent, up 3 basis points from late on Monday.
The dollar index .DXY , which measures the dollar against a basket of six major currencies, rose 0.19 percent. The euro EUR= lost 0.4 percent against the dollar. urn:newsml:reuters.com:*:nL1N13C15A
"I think the market has the mindset that there is almost nothing at this stage of the game that is going to dissuade the Fed from going in December," said Lane Newman, director of foreign exchange at ING Capital Markets in New York.
Oil prices slumped as the global oversupply in crude and petroleum products returned to focus. Brent LCOc1 dropped 1.5 percent to $43.91 a barrel, while U.S. crude CLc1 fell 1.7 percent at $41.02 a barrel. urn:newsml:reuters.com:*:nL3N13C0FX
"Unless the geopolitical tensions, which have obviously risen since Friday, are going to be manifested in physical supply destruction in the Middle East, I think sentiment should remain more bearish than bullish," PVM Oil Associates analyst Tamas Varga said.
Gold XAU= fell 0.7 percent, heading back near six-year lows.
Copper prices touched their lowest point in more than six years as fears about demand growth in China and a higher dollar fuelled negative sentiment. urn:newsml:reuters.com:*:nL3N13C33H