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GLOBAL MARKETS-Global growth lifts stocks; dollar hits 15-month low

* Stocks higher as global economy chugs along

* Dollar index falls to 15-month low

* Oil retreats from two-month high (Updates with close of European markets)

NEW YORK, Aug 1 (Reuters) - A gauge of world stocks advanced on Tuesday after scoring its longest monthly winning streak in over a decade on signs of an improving global economy and solid corporate earnings, while the U.S. dollar inched higher from 15-month lows.

Tepid U.S. inflation along with political turmoil in Washington has dented expectations of another Federal Reserve interest rate hike in coming months. Improving data in other major economies around the world has also served to push the greenback down nearly 11 percent from January peaks.

Preliminary estimates released by the European Union's statistics agency showed euro zone growth remained robust in the second quarter after a strong reading in the first three months of the year.

A measure of U.S. factory activity fell from a near three-year high in July amid a drop in new orders, while consumer spending barely rose in the prior month, setting the economy on a moderate growth path in the third quarter.

"I wont say it is 100 percent back but Europe is certainly in a good situation compared to where they were," said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

"What you are starting to see is a little more comfort in spreading your risk across countries whereas for a while it was pretty much invest in the U.S. because it is the best of the weaklings."

The dollar's decline, low inflation and robust global growth has stoked appetite for stocks, however, with the MSCI ACWI index extending its run after the index in July logged its longest streak of monthly gains since 2003-04.

MSCI's gauge of stocks across the globe gained 0.36 percent and the pan-European FTSEurofirst 300 index rose 0.62 percent.

European shares rose after two straight monthly declines, aided by gains in oil and financial shares.

The Dow Jones Industrial Average rose 81.03 points, or 0.37 percent, to 21,972.15, the S&P 500 gained 6.12 points, or 0.25 percent, to 2,476.42 and the Nasdaq Composite added 13.00 points, or 0.2 percent, to 6,361.12.

The dollar bounced slightly from a 15-month low against major currencies in the wake of the data, although the outlook remained cautious due to political turmoil in Washington and uncertainty about the Federal Reserve's path of rate hikes.

The dollar index rose 0.1 percent to 92.961 from a low of 92.777, with the euro down 0.19 percent to $1.1817.

The softer dollar is expected to benefit earnings for U.S. companies. Thomson Reuters data through Tuesday morning shows second-quarter earnings growth of 10.9 percent, with 72 percent of S&P 500 companies topping expectations.

Apple Inc, the largest U.S. company by market capitalization, is scheduled to report after the closing bell on Tuesday.

Bets on another quarter-percentage-point U.S. rate increase this year have fallen to about 43 percent, according to Thomson Reuters data.

In commodities, oil slid from a two-month high as major world producers kept pumping, worrying investors that several weeks of steady gains had pushed the rally too far, too fast.

U.S. crude fell 2.53 percent to $48.90 per barrel and Brent was last at $51.52, down 2.28 percent.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski and James Dalgleish)