GLOBAL MARKETS-Stocks rise, dollar falls before G20, Fed

* Stocks up, dollar slips

* U.S. data reinforces expectations on Fed easing

* Investors await G20 meeting, earnings reports

* Caterpillar, other in U.S. report upbeat results (Updates with U.S. markets' open)

By Manuela Badawy and Jeremy Gaunt

NEW YORK/LONDON, Oct 21 (Reuters) - World stocks rose and the dollar slipped on Thursday amid upbeat corporate earnings and diplomatic wrangling over currencies.

U.S. data on the job market and regional business activity reinforced expectations that the Federal Reserve would provide another round of stimulus to boost the economy.

The data "means that the Fed still has some work to do. They need to take some more precautions against the downside risk to the economy," said Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, North Carolina.

New U.S. claims for unemployment benefits fell more than expected last week but not enough to suggest much improvement in the labor market, while the Philadelphia Federal Reserve Bank's October business conditions index rose less than expected.

The dollar remained under selling pressure before meetings on Friday and Saturday by Group of 20 finance and central bank chiefs in South Korea who will try to hammer out an agreement to manage currency, trade and macroeconomic imbalances.

The latest Chinese data showed its economy was far from overheating, suggesting Beijing's rate hike this week may be enough for now to placate trading partners demanding a stronger yuan to reduce trade imbalances. [ID:nTOE69K00X]

U.S. earnings remained in the spotlight, with Caterpillar Inc reporting strong quarterly results and raising its full-year revenue forecast. [ID:nN18273532]

The Dow Jones industrial average <.DJI> was up 64.55 points, or 0.58 percent, at 11,172.52. The Standard & Poor's 500 Index <.SPX> was up 5.98 points, or 0.51 percent, at 1,184.15. The Nasdaq Composite Index <.IXIC> was up 16.03 points, or 0.65 percent, at 2,473.42.

Stock markets were generally higher, renewing a rally that have been under way since September.

The MSCI all-country world index <.MIWD00000PUS> was up 0.73 percent on the day with its emerging market component <.MSCIEF> leading the way, up 0.91 percent. MSCI's emerging market index has gained 12 percent this year.

European stocks also rose, but uncertainties about earnings prompted investors to take shelter in more defensive shares. The FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.69 percent.

DOLLAR VOLATILITY

Currency volatility rippled through markets after comments from U.S. Treasury Secretary Timothy Geithner late on Wednesday in which he said major currencies were in balance.

The dollar jumped initially but the rally faded as investors focused on the impact of a renewal of quantitative easing by the Fed.

Effective dollar devaluation stemming from another round of asset-buying by the U.S. central bank has spread tension across markets over a potential currency war.

"Since it is clear that the direction is toward an expansion of quantitative easing (in the United States), it is hard to expect a sustained rebound in the dollar," said Taisuke Tanaka, FX strategist at Nomura Securities in Tokyo.

The euro was up 0.41 percent higher at $1.4021 against the dollar as investors piled into the single European currency in the belief that the interest rate differential with its U.S. counterpart will continue to widen.

The U.S. Dollar Index <.DXY> down 0.27 percent at 76.966 from a previous session close of 77.171. Against the Japanese yen, the dollar was down 0.09 percent at 81.05 from a previous session close of 81.120.

The U.S. currency is down more than 10 percent against major currencies over the past four months.

U.S. government debt prices were lower in light volume as traders await the Fed's decision.

The benchmark 10-year U.S. Treasury note was down 6/32, with the yield at 2.5056 percent. The 2-year U.S. Treasury note was unchanged with the yield at 0.3507 percent. The 30-year U.S. Treasury bond was down 6/32, with the yield at 3.9033 percent. (Additional reporting by Richard Leong, Lucia Mutikani, Steven C. Johnson and Rodrigo Campos in New York; Editing by Kenneth Barry)