* Wall St rises on strong earnings despite soft data
* Euro dips below $1.30 after weak German PMI data
* European shares gain on rate cut hopes
* Commodities slip as China data adds to demand concerns
By Angela Moon
NEW YORK, April 23 (Reuters) - Global equity markets rose on Tuesday while the euro dipped to a two-week low against the dollar, after weak German data raised concerns about the health of the euro zone economy, strengthening the view among some investors that the European Central Bank will further ease its monetary policy.
Euro zone shares extended gains, with the FTSEurofirst 300 index of top European shares up 2 percent. Wall Street was on track for a third session of gains as strong earnings from a variety of sectors improved sentiment.
The euro fell as low as $1.2971 and could break decisively out of the $1.30 to $1.32 range that has held for the past couple of weeks. It was last down 0.7 percent on the day at $1.2978.
The latest Purchasing Managers' Indexes (PMIs) for the euro area showed business activity in Germany shrank for the first time in five months in April, while a broader gauge of the wider 17-nation zone showed the region still mired in recession.
The report also helped the yen to move higher and drove the commodity-linked Australian dollar to a six-week low against the U.S. dollar.
"Given the deteriorating fundamentals in the euro zone, the prospect of (an ECB rate cut) has certainly increased," said Boris Schlossberg, managing director of FX strategy, at BK Asset Management in New York.
"A rate cut would be the quickest and least expensive policy course."
The Dow Jones industrial average was up 120.37 points, or 0.83 percent, at 14,687.54. The Standard & Poor's 500 Index was up 11.45 points, or 0.73 percent, at 1,573.95. The Nasdaq Composite Index was up 30.95 points, or 0.96 percent, at 3,264.50.
Among top gainers on Wall Street, Netflix Inc (NasdaqGS: NFLX - news) impressed investors with solid subscriber growth and better-than-expected profits in the first quarter. The stock was up 23 percent at $214.90.
In Treasuries, the benchmark 10-year U.S. Treasury note was unchanged with the yield at 1.6945 percent.
The economic headwinds from China had earlier hit Asian shares, sending MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan down 0.3 percent. Chinese shares posted their worst daily loss in nearly a month.
MSCI's world equity index, which is heavily weighted toward U.S. shares, was up 0.8 percent.
Adding concerns about growth in Asia, the flash HSBC (LSE: HSBA.L - news) Purchasing Managers' Index for China in April fell to 50.5 in April from 51.6 in March. But was still stronger than February's reading of 50.4.
The HSBC report on China, its first economic indicator for the second quarter following weaker-than-expected growth in first-quarter gross domestic product, weighed heavily on commodity markets worried about the outlook for future demand.
Brent crude oil fell towards $99 a barrel on concerns about the outlook for fuel demand.
"China and German data disappointed, so it's not a big surprise that oil comes off, and the technical picture points to another push lower," said SEB (Paris: FR0000121709 - news) analyst Bjarne Schieldrop.
June Brent crude was down $1.22 to $99.17 a barrel while U.S. crude for June delivery was down $1.10 at $88.09.
Gold dropped around 1 percent to $1,415 an ounce on the growth concerns and was also hit by reports that investors in exchange-traded funds are continuing to liquidate positions.
Gold has recovered some ground after last week's tumble, but ETF selling sums up weakening confidence in the metal.