* Stocks recover after initial jitters over German politics
* Dollar gains against euro after coalition talks fail
* Oil prices slip before OPEC meeting (Adds oil, gold settlement prices)
By Herbert Lash
NEW YORK, Nov 20 (Reuters) - Global equities rose on Monday as confidence over economic growth around the world helped investors brush off concerns about the collapse of government talks in Germany, which sent the euro lower against the U.S. dollar.
In the latest indication of global economic expansion, the German central bank said the national economy is expanding into the end of the year on strong industrial activity and firms are struggling to find workers to satisfy orders.
Adding to the global growth story, the Conference Board’s leading economic index for the United States rose 1.2 percent in October, or double the rate economists polled by Reuters had expected.
Investors shrugged off the political impasse in Germany while the U.S. leading economic indicators are further evidence of fairly strong economic data and an economy that is still gaining traction, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
A tug of war among investors over how to view tax reform efforts in the U.S. Congress has left the market without a strong impetus, Arone said.
“It doesn’t seem the market can get any direction. As a result, it’s two steps forwards, one step back,” he said.
The DAX benchmark for German stocks closed up 0.50 percent, the pan-European FTSEurofirst 300 index of leading regional stocks rose 0.63 percent and MSCI’s gauge of stocks across the globe gained 0.10 percent.
On Wall Street, the Dow Jones Industrial Average rose 86.94 points, or 0.37 percent, to 23,445.18. The S&P 500 gained 2.86 points, or 0.11 percent, to 2,581.71 and the Nasdaq Composite added 3.61 points, or 0.05 percent, to 6,786.40.
The dollar touched its highest against a basket of major currencies in nearly a week as the euro weakened after German Chancellor Angela Merkel failed to form a three-way coalition government.
The breakdown of talks between Merkel’s conservative bloc, the liberal, pro-business Free Democrats (FDP), and environmentalist Greens raises the prospect of new elections and clouds her future after 12 years in power.
The news revived “a key risk factor” for the European single currency, said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
“With the euro losing favor, given the messy can of worms that has been tipped over in Europe, that’s helping the U.S. dollar weather its own political uncertainties,” he said.
The dollar index rose to 94.074, its highest since Nov. 14.
The euro fell to $1.1720 in overnight trading following news of failed coalition talks. It fell dramatically against the yen to 131.16 yen, its weakest since Sept. 15.
The Japanese yen weakened 0.5 percent versus the greenback at 112.63 per dollar.
Oil prices slipped, extending recent weakness ahead of a meeting of the Organization of the Petroleum Exporting Countries next week, while the rally in the dollar negatively affected commodities.
Brent closed down 0.80 percent at $62.22 a barrel, while U.S. crude fell 0.81 percent to settle at $56.09 a barrel.
U.S. gold futures settled down 1.6 percent at $1,275.30.
Benchmark copper on the London Metal Exchange rose 0.77 percent to $6,829.50 per tonne.
U.S. Treasury yields rose as investors awaited minutes on Wednesday from the Fed’s last meeting.
The U.S. central bank kept interest rates unchanged when it concluded its two-day meeting on Nov. 1 and pointed to solid U.S. economic growth and a strengthening labor market while playing down the impact of recent hurricanes.
Benchmark 10-year notes fell 4/32 in price to yield 2.3701 percent.
Germany’s 10-year bond yield dipped to its lowest level in around 1-1/2 weeks after the talks to form a coalition government failed. The yield fell around 1.5 basis points to about 0.35 percent, its lowest level since Nov. 9.
Reporting by Herbert Lash; Editing by Nick Zieminski