(Reuters) - World stocks and oil prices rose on Tuesday after data showing the euro zone's sputtering economy shrank in the second quarter lifted expectations of further central bank stimulus. U.S. and German bond prices fell, however, as German and French growth data were not as weak as predicted, paring earlier bets the U.S. Federal Reserve and European Central Bank will announce new rounds of stimulus in the coming weeks. Stronger-than-expected data on U.S. retail sales and producer prices intensified the sell-off in safe-haven bonds and gold, while lifting the dollar. The 17-nation euro zone currency block contracted by 0.2 percent in the quarter, although regional powerhouse Germany eked out growth of 0.3 percent. But even there, a forward-looking sentiment indicator pointed to poorer performance ahead. "Germany is not managing to decouple itself from the rest of the euro zone," said Bernd Hartmann, head of investment research at VP Bank. "That means the last pillar of European growth is gradually buckling." The euro zone data followed worrying China trade figures on Friday and Monday's report showing a slowdown in Japan. Both lent support to the view that central banks will be forced to act as early as next month to boost flagging global growth. The economic picture in the United States appears marginally better. Official data showed retail sales rose 0.8 percent in July, the first rise in four months and biggest since February. Economists polled by Reuters had expected a 0.3 percent increase. The Standard & Poor's 500 index hit its highest level since May 1 partly due to the stronger-than-expected rise in consumer spending. "The retail sales is good, and it just continues the trend right now for the S&P to go higher," said Frank Lesh, a futures analyst and broker at FuturePath Trading LLC in Chicago. In early trading, the Dow Jones industrial average .DJI was up 29.08 points, or 0.22 percent, at 13,198.51. The S&P 500 .SPX was up 3.46 points, or 0.25 percent, at 1,407.57. The Nasdaq Composite Index .IXIC was up 5.98 points, or 0.20 percent, at 3,028.50. Top European shares .FTEU3, which took their biggest tumble in a week on Monday, were up 0.5 percent, helping to lift the global MSCI index .MIWD00000PUS by 0.25 percent to 323.34 points. In Tokyo, the benchmark Nikkei index .N225 closed up 0.5 percent at 8,929.88. .T Oil prices edged higher as the weak European economic data was slightly less gloomy than anticipated, and ahead of a U.S. report expected to show a drop in oil stocks. Brent crude rose 4 cents to $113.65 a barrel after flirting with its highest level since early May, while U.S. crude rose $1 to $93.73 a barrel. In the bond market, U.S. Treasuries and German Bund prices fell as traders reduced their safe-haven holdings in the wake of the less dire growth data on German and France, the euro zone's two biggest economies. German Bund futures were down 78 basis points at 142.40, within striking distance of a one-month low set last week. Benchmark U.S. 10-year notes were down 14/32 in price at 99-5/32 with the yield at 1.715 percent, up 5 basis points. Earlier, the 10-year yield was close to its 100-day moving average of 1.7443 percent, which is a technical indicator that U.S. yields might head higher. In the currency market, the July improvement in U.S. consumer spending helped boost the dollar against the Japanese yen. It was up 0.6 percent at 78.80 yen. The euro was up 0.09 percent at $1.2342. It gained when German growth slightly beat expectations but eased after the influential ZEW investor sentiment survey indicated Europe's largest economy could begin shrinking in the third quarter. In precious metal trading, gold fell 0.68 percent to its lowest level in over a week. It was last at $1,598.80 an ounce, with investors staying cautious while they wait to hear more from the central banks about plans to stimulate growth. (Additional reporting by Chuck Mikolajczak in New York; Marc Jones, Jan Harvey and Richard Hubbard in London; Editing by Dan Grebler)

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