GLOBAL MARKETS-Stocks gain as Wall Street rallies, US yields slip

(Updated at 4:15 p.m. ET/ 2015 GMT)

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China's stimulus details disappoint, impacting global stocks

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U.S. inflation data and corporate earnings in focus

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U.S. Treasury yields rise on recalibrated Fed expectations

By Chuck Mikolajczak

NEW YORK, Oct 8 (Reuters) - A gauge of global stocks advanced on Tuesday after a rally on Wall Street overshadowed disappointment over the lack of details in China's stimulus, as investor focus shifts to upcoming U.S. inflation data and corporate earnings. On Wall Street, U.S. stocks closed sharply higher as the benchmark S&P 500 bounced back from a drop of nearly 1% a day earlier, with a jump of more than 2% in technology stocks providing key support.

Stocks had stumbled on Monday on increasing concerns about a wider conflict in the Middle East and as last week's solid U.S. payrolls report caused a reassessment on the size and pace of interest rate cuts from the Federal Reserve.

Investors are also eyeing Thursday's inflation reading with the release of the latest consumer price index (CPI), while banks are scheduled to kick off the corporate earnings season at the end of the week. "The Fed keeps telling you that they're data-dependent - so the end of this week is big to see whether or not inflation is truly tamed," said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh. "But the Fed has been signaling where - not necessarily when - rates are going, and they have signaled that they're going lower."

The Dow Jones Industrial Average rose 126.13 points, or 0.30%, to 42,080.37, the S&P 500 rose 55.19 points, or 0.97%, to 5,751.13 and the Nasdaq Composite rose 259.01 points, or 1.45%, to 18,182.92. European shares closed lower, as a lack of details on China's long-awaited fiscal stimulus weighed on sectors related to the world's second-largest economy, such as mining and luxury goods.

MSCI's gauge of stocks across the globe advanced 1.24 points, or 0.15%, to 844.96. The STOXX 600 index ended 0.55% lower. Hong Kong's Hang Seng Index plunged 9.4%, its biggest drop since 2008, erasing some of the big gains made during a Chinese holiday, after government economic planner Zheng Shanjie told reporters that China is "fully confident" of achieving economic targets for 2024 and would pull forward 200 billion yuan ($28.36 billion) from next year's budget to spend on investment projects and support local governments.

But a failure to sufficiently detail new or large measures sparked concerns about China's commitment to pull the economy out of its current slump.

The Shanghai Composite and blue-chip CSI300 , both of which were closed during the holiday, ended 4.6% and 5.9% higher, respectively, paring earlier gains of more than 10%.

U.S. Treasury yields were slightly lower in choppy trading on factors such as Federal Reserve monetary policy, investor positioning, and economic outlooks affected market moves. Expectations for a 25-basis-point rate cut from the Fed at its November meeting stand at 87.3%, according to CME's FedWatch Tool, with the market pricing in a 12.7% chance of the Fed's holding rates steady. Last week the market was fully pricing in a cut of at least 25 basis points with a 36.8% chance for another outsized 50 basis point cut.

The yield on benchmark U.S. 10-year notes dipped 0.6 basis point to 4.02%. Oil prices dropped, following a recent rally sparked by rising hostilities in the Middle East, as fears eased of supply interruptions from the conflict between Israel and Iran and a massive Gulf of Mexico hurricane.

U.S. crude settled down 4.63% to $73.57 a barrel, and Brent tumbled to settle at $77.18 per barrel, also down 4.63%. Prime Minister Benjamin Netanyahu said Israeli airstrikes had killed two successors to Hezbollah's slain leader, as Israel expanded its offensive against the Iran-backed group. The comments were released hours after the deputy leader of Hezbollah left the door open to a negotiated ceasefire.

The dollar index, which measures the greenback against a basket of currencies, was unchanged at 102.48, with the euro up 0.04% at $1.0978.

Against the Japanese yen, the dollar strengthened 0.07% to 148.29. Sterling strengthened 0.13% to $1.31.

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(Reporting by Chuck Mikolajczak; additional reporting by Lisa Mattackal and Pranav Kashyap in Bengaluru, Gertrude Chavez-Dreyfuss and David French in New York; Editing by Nick Zieminski, Will Dunham and Leslie Adler)