* MSCI world equity index rebounds slightly as Wall Street advances * Dollar dips but remains above four-week low * Oil drops below $110 as Syrian tensions ease further By Herbert Lash NEW YORK, Sept 17 (Reuters) - The dollar retreated and global equity markets were mostly flat on Tuesday even though Wall Street advanced, as investors took positions before this week's Federal Reserve policy meeting that is expected to start the rolling back of its stimulus program. The euro rallied against the dollar after a better-than-expected reading of a German sentiment survey, while European shares edged lower, pressured by weakness in the auto sector following a decline in demand last month. But Wall Street rose, leading a measure of global equity markets to rebound, after data on U.S. consumer prices added to sentiment that the Fed will start trimming its bond buying at the end of its two-day meeting, which begins on Tuesday. "It seems like now the market is believing that tapering will be very well managed by Bernanke, that he knows exactly what the market is expecting and that he's not going to disappoint," said Jack De Gan, principal and senior advisor at Harbor Advisory in Portsmouth, New Hampshire, referring to Fed Chairman Ben Bernanke. U.S. consumer prices barely rose in August. However, gains in rents and medical care costs pointed to a stabilization in underlying inflation that could allow the Fed to begin to scale back its $85 billion a month in bond purchases. The Labor Department said its Consumer Price Index edged up 0.1 percent last month after rising 0.2 percent in July. In the 12 months through August, the increase in the CPI slowed to 1.5 percent after advancing 2.0 percent in July. Economists had expected consumer prices to rise 0.2 percent last month and increase 1.6 percent from a year-ago. The euro was last up 0.08 percent at $1.3343. The dollar was down 0.07 percent versus a basket of currencies at 81.242 and was last up 0.28 percent at 99.34 yen. MSCI's all-country world equity index rose 0.05 percent, lifted by gains in U.S. stocks, in particular a 1.5 percent rise to $457.05 in shares of Apple Inc. The Dow Jones industrial average was up 52.65 points, or 0.34 percent, at 15,547.43. The Standard & Poor's 500 Index was up 6.22 points, or 0.37 percent, at 1,703.82. The Nasdaq Composite Index was up 15.91 points, or 0.43 percent, at 3,733.76. Europe's FTSEurofirst 300 index of leading European shares was down 0.2 percent at 1,255.93. Brent crude fell below $109 a barrel as a deal averting any imminent U.S. attack on Syria calmed fears of a disruption to Middle East oil supplies and after output resumed at a large oilfield in western Libya. Brent crude for delivery in November fell $1.44 a barrel to a near-one-month low of $108.63. U.S. crude for October delivery was down 72 cents at $105.87 a barrel. Longer-dated U.S. Treasuries prices turned lower, erasing earlier gains, as higher Wall Street stock prices and weaker German Bunds reduced initial bids for U.S. government debt. Benchmark 10-year Treasury notes were flat in price to yield 2.8625 percent. Safe-haven Bunds fell after data showed the ZEW German economic sentiment survey for September rose to 49.6 from 42.0 in August, significantly above the 46.0 consensus forecast. Bund futures were last 49 ticks lower on the day at 138.01.