* Stocks higher as global economy chugs along
* Dollar index falls to 15-month low
* Oil retreats from two-month high (Updates with close of U.S. 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 bounced after touching 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.
"Its all about negative dollar momentum," said Vassili Serebriakov, FX strategist at Credit Agricole in New York. "If youre short the dollar, the move has been playing out in your favor and there is little reason to change the view."
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 0.38 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 72.80 points, or 0.33 percent, to close at 21,963.92, the S&P 500 gained 6.05 points, or 0.24 percent, to 2,476.35 and the Nasdaq Composite added 14.82 points, or 0.23 percent, to 6,362.94.
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 0.22 percent to 93.068 from a low of 92.777, with the euro down 0.35 percent to $1.1799.
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.
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 settled down 2 percent at $49.16 per barrel and Brent settled 1.8 percent lower at $51.78 on the day.
(Additional reporting by Sam Forgione; Editing by James Dalgleish)