GLOBAL MARKETS-Euro rallies, commodities gain on growth outlook

* Euro hits 8-week high vs dollar as sovereign fears wane

* Oil rises on dollar slump, firm demand outlook

* Bond prices firm but struggle for direction (Adds opening of U.S. markets; changes dateline, previous LONDON, byline)

By Herbert Lash and Natsuko Waki

NEW YORK/LONDON, Jan 19 (Reuters) - The euro rallied to an eight-week high on Wednesday on growing expectations the debt crisis in Europe is under control, while oil and other commodity prices gained on further signs of global demand.

World equities hit their highest in nearly 2-1/2 years, but U.S. stocks eased in early trade after lower quarterly profit at Goldman Sachs <GS.N> deflated some of the optimism about corporate results following Apple's <AAPL.O> blow-out report.

The euro climbed over 1 percent on the day to hit an eight-week high of $1.3538, according to Reuters data, on reported Asian sovereign buying and continued short-covering. For details see:[ID:nN19220726]

The euro could extend gains in the weeks ahead amid hope policy-makers will stanch a debt crisis that has engulfed Greece and Ireland.

"People are very impressed with the determination of European officials and are expecting them to successfully deal with the sovereign debt crisis," said Steven Englander, head of G10 strategy at CitiFX in New York.

The dollar weakened to eight-week lows, helping to lift commodity prices, which also gained on rising global demand prospects. Copper hit an all-time high and crude oil rose after the International Energy Agency boosted its growth forecast.

The IEA became the second major forecaster this week to revise up its 2011 oil demand growth estimate on buoyant economic growth, led by Asian countries.

ICE Brent futures <LCOc1> rose 9 cents to $97.89 a barrel, after earlier rising to $98.60.

U.S. crude oil prices <CLc1> slipped rose 74 cents to $90.68 a barrel, after earlier rising to $92.10.

The 19-commodity Reuters-Jefferies CRB index <.CRB> rose to a 27-month high, helped by a rise in copper prices to a record high. Benchmark copper <CMCU3> on the London Metal Exchange hit a record at $9,781 a tonne.

Spot gold prices <XAU=> rose $2.46 to $1,369.70 an ounce.

A weaker dollar, ongoing Asian buying and a broader investor push into commodities bolstered gold prices.

The dollar was down against a basket of major currencies, with the U.S. Dollar Index <.DXY> down 0.52 percent at 78.549.

European stocks fell, as did major U.S. indexes except for the Dow Industrials, but global shares rose. MSCI's all-country world index <.MIWD00000PUS> pared some gains, but was still ahead yb 0.1 percent

A fall in banking shares helped push the broad S&P 500 index lower. The Select Sector Financial Select Sector SPDR Fund <XLF.P> fell 1 percent.

"Banks had some difficulty with revenue as seen with Goldman Sachs this morning," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.

The Dow Jones industrial average <.DJI> was up 8.18 points, or 0.07 percent, at 11,846.11. The Standard & Poor's 500 Index <.SPX> was down 4.31 points, or 0.33 percent, at 1,290.71. The Nasdaq Composite Index <.IXIC> was down 13.19 points, or 0.48 percent, at 2,752.66.

U.S. Treasuries were modestly higher, as the market struggled for direction in the absence of data that would change the prevalent view of easy monetary policy and modest economic growth. [ID:nN19353894]

Heavy corporate supply has injected market volatility, as dealers bought and sold Treasuries to hedge the yields on the bonds they underwrite, analysts said.

The benchmark 10-year U.S. Treasury note <US10YT=RR> reversed course to trade up 5/32 in price, to yieldd 3.35 percent, after earlier trading lower. (Reporting by Angela Moon and Richard Leong in New York; Jessica Mortimer, Emma Farge, Amanda Cooper and Silvia Antonioli in London; Blaise Robinson in Paris; Writing by Herbert Lash; Editing by Theodore d'Afflisio)