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* Wall St opens higher as discretionary stocks rise
* Yields inch up for second day ahead of Fed minutes
* Oil prices rise on expected drop in U.S. inventories
* Dollar edges down from 14-year high (Updates to U.S. market open, adds details, quote, changesdateline, previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Jan 4 (Reuters) - Stocks around the world gainedfor a second straight day on Wednesday, boosted by upbeat globaleconomic data, as investors await minutes of the FederalReserve's December meeting in which the U.S. central bank raisedinterest rates.
The dollar retreated from a 14-year high against a basket ofcurrencies and oil prices ticked higher on expectations thatU.S. crude inventories are falling.
MSCI's world index, which tracks shares in46 countries, rose 0.71 percent to a three-week high.
The index was helped by a batch of rosy economic reportsfrom Europe, and got a further boost after U.S. stocks openedhigher.
U.S. stocks extended gains into the second trading day ofthe new year, supported by gains in consumer discretionarystocks.
Investors are waiting for the Federal Reserve to release theminutes of its December meeting in which it raised interestrates. Investors will now pore over the minutes, expected at2:00 p.m. ET (1900 UTC), to assess policymakers' view on theeconomy and U.S. president-elect Donald Trump's incomingadministration.
"It will be interesting to see just how much the (incomingTrump administration's) fiscal stimulus plans contributed to theinterest rate forecasts from Fed policymakers in December andwhether there is potential for the pace to be faster still,"said Craig Erlam, senior market analyst at Oanda.
The Dow Jones Industrial Average rose 32.99 points,or 0.17 percent, to 19,914.75, the S&P 500 gained 9.69points, or 0.43 percent, to 2,267.52 and the Nasdaq Composite added 34.53 points, or 0.64 percent, to 5,463.61.
European shares edged down from a one-year high withretailers in focus after standout faller Next cut itsprofit guidance and cautioned on future trade. Europe's broadFTSEurofirst 300 index fell 0.27 percent to 1,440.67.
The dollar edged down from a 14-year high against a basketof currencies, with investors cautious about increasing bets onthe greenback before getting fresh clues on the U.S. economy andthe timing of interest rate rises.
The dollar index - which measures the greenbackagainst a basket of six major rivals - was down 0.58 percent to102.61, having hit a peak of 103.82 on Tuesday.
Oil prices ticked higher on expectations that U.S. crudeinventories are falling and signs that oil producers will stickto agreed output cuts that took effect this week.
Brent crude was up 0.67 percent at $55.84 a barrel,while U.S. crude was up 0.65 percent at $52.67.
In bond markets, U.S. Treasury debt yields edged higher fora second straight day in quiet trading, continuing to benefitfrom increased market appetite for risk with the rise in stocksand oil prices, as well as an improving global economicenvironment.
"Yesterday we had a confluence of factors that led to higheryields: we had strong inflation numbers from overseas; we hadoil starting to rally," said Subadra Rajappa, head of U.S. ratesstrategy at Societe Generale in New York.
"This is just momentum from yesterday's selloff that'sreally pushing yields higher today," she said.
The U.S. 10-year note was down 3/32 in price toyield 2.463 percent, compared with 2.454 percent late onTuesday.
Gold touched a near-four week high helped by the retreatingdollar and increased demand from major consumers China andIndia. Spot gold prices were up 0.49 percent at$1,164.45. (Reporting by Saqib Iqbal Ahmed; Additional reporting byGertrude Chavez-Dreyfuss in New York and Jamie McGeever inLondon; Editing by Nick Zieminski)
