GLOBAL MARKETS-Stocks rise, trimming Aug loss; commods up

* Fed stimulus hopes underpin stocks

* Weak US data stirs more speculation of monetary easing

* World indexes set for biggest monthly loss in a year

* Commodities recover early Aug loss as oil, copper up (Updates market moves)

By Barani Krishnan

NEW YORK, Aug 31 (Reuters) - Stock markets around the world rose for a fourth straight day on Wednesday, trimming August's sharp losses as hopes for more help from the U.S. Federal Reserve drove buying in equities, oil and metals.

Markets have turned sharply in recent days, rebounding from several weeks of losses that put the MSCI All-World index <.MIWD00000PUS> on track for its worst month in more than a year.

Mounting speculation the Fed was preparing a new round of monetary expansion has helped the market regain its footing. The Fed's minutes from its latest policy session bolstered a growing belief the central bank will hint at new stimulus after its $600 billion bond-buying program expired in June. For details, see [ID:nFEDAHEAD]

If its efforts, along with fiscal stimulus plans, are enough to forestall a recession, the market could continue to recover.

"The depth of the slowdown is going to depend on what monetary and fiscal stimulus we see in the United States," said Gonzalo Fernandez, analyst at Santander in Mexico City.

U.S. economic data released on Wednesday showed the economy continues to struggle, with the pace of private sector job growth slowing in August for the second straight month. Factory activity in the Chicago region expanded at its slowest pace since November 2009. [ID:nN1E77U04P] [ID:nCAT005506]

In midday trading, the Dow Jones industrial average <.DJI> was up 88.62 points, or 0.77 percent, at 11,648.57. The Standard & Poor's 500 Index <.SPX> was up 10.82 points, or 0.89 percent, at 1,223.74. The Nasdaq Composite Index <.IXIC> was up 14.86 points, or 0.58 percent, at 2,590.97. [.N]

Among the most actively traded U.S. stocks were AT&T , which fell 4.4 percent after the U.S. Justice Department said it would block the telephone company's merger with T-Mobile USA on anti-competition concerns. [ID:nN1E77U0QO]

European shares <.FTEU3> were up almost 3 percent, while the MSCI All World Index gained 1.5 percent.

For the month, U.S. stocks <.SPX> were down about 5 percent, on track to post the steepest monthly loss since June 2010. Global shares, tracked by the MSCI All World, showed a 7 percent drop, their worst month since May last year.

Minutes of the Fed's August meeting, released on Tuesday, showed the central bank considered a range of actions to help the struggling economy, including the unprecedented step of tying interest rate policy to a specific unemployment level. [ID:nN1E77T1HY] [ID:nN1E77T08F] [ID:nN9E7H701R]

In a note released on Wednesday, economists at Goldman Sachs commented that the Fed was "more dovish than expected," indicating the possibility of stimulus at the September 20-21 meeting was "an even closer call than we thought previously."

Chicago Federal Reserve Bank President Charles Evans on Tuesday made clear he supported further action to support growth, while Minneapolis Fed chief Narayana Kocherlakota suggested further stimulus would have a hard time winning his support.

Commodities, tracked by the Reuters-Jefferies CRB index <.CRB>, were poised to end the month in the positive, after a sharp fall in early August.

Crude oil futures in London were up 1 percent, trading above $115 a barrel. Copper futures in New York jumped almost 2 percent, to a one-month high of nearly $4.25 a lb.

Spot gold was down 0.7 percent at $1,824.50 an ounce as rising equity markets weakened safe-haven bids. But it was sharply off early session lows as soft the U.S. economic data raised hopes the Federal Reserve would use additional stimulus to boost the economy.

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Monthly returns in MSCI AC world:

http://link.reuters.com/kuh53s

Monthly global stocks graphic since 1971:

http://link.reuters.com/jeg33s

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In currency trading, the dollar slid to a session low against the yen, touching 76.84 yen and marking a new bottom since Aug 19. For the month, the dollar was flat against a basket of currencies <.DXY>.

U.S. Treasuries fell, with the benchmark 10-year note down 8/32, its yield at 2.2022 percent.

On Thursday, the Institute for Supply Management is to release its index of U.S. national manufacturing activity and the Labor Department on Friday issues the U.S. nonfarm payrolls report for August. (Additional reporting by Chuck Mikolajczak in New York, Michael O'Boyle in Mexico City; Editing by Dan Grebler)