GLOBAL MARKETS-Dollar slump spurs global stocks, oil higher

* Global stocks jump as U.S. data underpins recovery hopes

* Oil edges over $72 a barrel as U.S. stockpiles decline

* U.S. dollar slips to 1-year low against major currencies

* Strong economic data kicks government bond prices lower (Updates with close of U.S. markets)

By Herbert Lash

NEW YORK, Sept 16 (Reuters) - The U.S. dollar slumped to near one-year lows on Wednesday, helping lift global stocks and commodities, as fresh U.S. data spurred optimism about an economic recovery and eroded demand for safe-haven assets.

Most prices for U.S. and euro zone government debt fell after a second day of surprisingly strong U.S. economic data fueled expectations of a robust recovery from the worst global downturn since World War Two. For details see [ID:N16128088].

Oil rose to over $72 a barrel after data showed U.S. crude stockpiles fell more than expected last week, and U.S. gold futures soared to highs dating back to July 2008, driven by fears of potential inflation. [ID:nSP530535] [ID:nN16533113]

The weak dollar and economic optimism helped the Reuters-Jefferies CRB index .CRB of 19 mostly U.S.-traded commodities to rise almost 2 percent and hit a one-month high.

Wall Street rallied for a third day as increased industrial output in August and a pickup in mergers and acquisitions reinforced hopes the economy was well on the way to recovery.

"The dollar continues to get pounded. That translates into higher commodity stocks, and industrials continue to be a beneficiary" of dollar weakness, said Michael James, senior trader at investment bank Wedbush Morgan in Los Angeles.

Shares of industrial companies that benefit from a weaker dollar gained, including General Electric Co (GE.N), up 6.3 percent. The dollar's decline also boosted commodities prices, which in turn lifted shares of natural resource companies.

Shares of natural resource companies also rose on the dollar's decline.

The euro EUR= rose 0.5 percent to $1.4731, after earlier climbing to $1.4736, the highest since late September 2008.

The ICE Futures U.S. dollar index .DXY, which tracks its performance against a basket of six other major currencies, fell as low as 76.151, its weakest in nearly a year.

Traders have sold the dollar heavily this month as recovery hopes diminished safe-haven demand. Speculation that the dollar was replacing the yen as a funding currency and concerns about the growing U.S. fiscal deficit fueled dollar selling.

"There's still this persistent link between Wall Street and risk," said Ronald Simpson, a currency analyst at Action Economics in Tampa, Florida. "With stocks going up, it continues to be very difficult for the dollar to rally."

U.S. stocks rose more than 1 percent, as did equity markets in Europe and Asia, where stocks rose on Tuesday's U.S. retail sales report and remarks by Federal Reserve Chairman Ben Bernanke that the U.S. recession was probably over.

The Dow Jones industrial average .DJI closed up 108.30 points, or 1.12 percent, at 9,791.71. The Standard & Poor's 500 Index .SPX added 16.13 points, or 1.53 percent, at 1,068.76. The Nasdaq Composite Index .IXIC gained 30.51 points, or 1.45 percent, at 2,133.15.

U.S. industrial production rose for a second consecutive month in August, while higher gasoline costs pushed up U.S. consumer prices last month. Economists said the risk of inflation in the United States remained low. [ID:nN16118540]

"The data still suggests strength in the U.S. economy in the second half," said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Connecticut.

"If we see strong numbers between now and next March, it's going to be pretty hard to get in the way of equities going higher and risk assets going higher," Gilmore said.

A Reuters poll of economists in the United States and Europe released on Wednesday forecast strong U.S. economic growth in the current quarter after four quarters of decline. The poll put growth at a 3 percent annual rate, significantly higher than the 2.4 percent growth rate in the August poll.

NYMEX crude CLc1 rose $1.58 to settle at $72.51 a barrel, adding to Tuesday's gain of $2.07, while ICE Brent LCOc1 rose $1.81 to $71.67.

Most U.S. Treasuries fell. Benchmark 10-year notes US10YT=RR slipped 3/32 in price to yield 3.47 percent.

The December gold contract GCZ9 finished $13.90 higher in New York at $1,020.20 an ounce.

In Europe, the FTSEurofirst 300 index .FTEU3, led by heavyweight banks and commodity stocks, closed up 1.39 percent at 1,006.15, rising for eight of the past nine sessions.

Most major Asian equity markets gained 1 percent or more after Tuesday's U.S. retail sales report. The MSCI index of Asia-Pacific shares .MIAPJ0000PUS excluding Japan rose 2.6 percent to its highest this year.

Japan's benchmark Nikkei stock index .N225 rose 0.5 percent. (Reporting by Edward Krudy, Nick Olivari and Burton Frierson in New York and Chris Baldwin, Jessica Mortimer and Dominic Lau in London; Writing by Herbert Lash; Editing by James Dalgleish)