* Wall St opens higher as discretionary stocks rise
* Yields inch up for second day ahead of Fed minutes
* Oil prices rise on expected drop in U.S. inventories
* Dollar edges down from 14-year high (Updates to U.S. market open, adds details, quote, changes dateline, previous LONDON)
By Saqib Iqbal Ahmed
NEW YORK, Jan 4 (Reuters) - Stocks around the world gained for a second straight day on Wednesday, boosted by upbeat global economic data, as investors await minutes of the Federal Reserve's December meeting in which the U.S. central bank raised interest rates.
The dollar retreated from a 14-year high against a basket of currencies and oil prices ticked higher on expectations that U.S. crude inventories are falling.
MSCI's world index .MIWD00000PUS , which tracks shares in 46 countries, rose 0.71 percent to a three-week high.
The index was helped by a batch of rosy economic reports from Europe, and got a further boost after U.S. stocks opened higher.
U.S. stocks extended gains into the second trading day of the new year, supported by gains in consumer discretionary stocks. are waiting for the Federal Reserve to release the minutes of its December meeting in which it raised interest rates. Investors will now pore over the minutes, expected at 2:00 p.m. ET (1900 UTC), to assess policymakers' view on the economy and U.S. president-elect Donald Trump's incoming administration.
"It will be interesting to see just how much the (incoming Trump administration's) fiscal stimulus plans contributed to the interest rate forecasts from Fed policymakers in December and whether there is potential for the pace to be faster still," said Craig Erlam, senior market analyst at Oanda.
The Dow Jones Industrial Average .DJI rose 32.99 points, or 0.17 percent, to 19,914.75, the S&P 500 .SPX gained 9.69 points, or 0.43 percent, to 2,267.52 and the Nasdaq Composite .IXIC added 34.53 points, or 0.64 percent, to 5,463.61.
European shares edged down from a one-year high with retailers in focus after standout faller Next NXT.L cut its profit guidance and cautioned on future trade. Europe's broad FTSEurofirst 300 index .FTEU3 fell 0.27 percent to 1,440.67. dollar edged down from a 14-year high against a basket of currencies, with investors cautious about increasing bets on the greenback before getting fresh clues on the U.S. economy and the timing of interest rate rises. dollar index .DXY - which measures the greenback against a basket of six major rivals - was down 0.58 percent to 102.61, having hit a peak of 103.82 on Tuesday.
Oil prices ticked higher on expectations that U.S. crude inventories are falling and signs that oil producers will stick to agreed output cuts that took effect this week. crude LCOc1 was up 0.67 percent at $55.84 a barrel, while U.S. crude CLc1 was up 0.65 percent at $52.67.
In bond markets, U.S. Treasury debt yields edged higher for a second straight day in quiet trading, continuing to benefit from increased market appetite for risk with the rise in stocks and oil prices, as well as an improving global economic environment. we had a confluence of factors that led to higher yields: we had strong inflation numbers from overseas; we had oil starting to rally," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale (PA:SOGN) in New York.
"This is just momentum from yesterday's selloff that's really pushing yields higher today," she said.
The U.S. 10-year note US10YT=RR was down 3/32 in price to yield 2.463 percent, compared with 2.454 percent late on Tuesday.
Gold touched a near-four week high helped by the retreating dollar and increased demand from major consumers China and India. Spot gold prices XAU= were up 0.49 percent at $1,164.45.