GLOBAL MARKETS-Stocks hit new highs as Irma, North Korea fears ebb

* S&P 500, Nasdaq (Frankfurt: 813516 - news) , Dow, MSCI (Frankfurt: 3HM.F - news) index set new records

* Dollar steady on rising risk appetite

* Oil edges higher as OPEC output falls

* German Bund yield set for biggest daily jump since July

By Herbert Lash

NEW YORK, Sept 12 (Reuters) - Stocks on Wall Street and a gauge of global equity markets set new closing highs on Tuesday after the feared impact of Hurricane Irma waned and the easing of tensions with North Korea boosted risk appetite and drove a sell-off in global bond markets.

The U.S. dollar eked out modest gains, helped by the bounce in government debt yields and ahead of U.S. inflation data on Thursday that could influence the timing of the next Federal Reserve interest rate hike.

The S&P 500, Nasdaq and the Dow Jones Industrial Average set new closing highs as Wall Street advanced, led by gains in financials.

Shares (Berlin: DI6.BE - news) of Apple (NasdaqGS: AAPL - news) , the most valuable U.S. company, fell 0.42 percent to close at $160.82 after the unveiling of the 10th anniversary edition of the iPhone. The stock rose as much as 1 percent but then turned lower during product presentations.

European shares rose to a five-week high, extending the relief bounce from the previous session.

MSCI's all country world stock index, which tracks more than 2,400 stocks in 47 countries, rose 0.29 percent after a 0.9 percent jump on Monday, its fourth-largest gain so far this year.

David Joy, chief market strategist at Ameriprise Financial (Frankfurt: A0F55S - news) in Boston, said the environment for risk assets has improved.

"As long as these two issues - North Korea and the hurricane - have receded as concerns, it gives investors a green light to focus on stronger fundamentals," Joy (Taiwan OTC: 4559.TWO - news) said.

Investors also welcomed U.S. Treasury Secretary Steve Mnuchin's comments that he was hopeful for tax reform by year's end with a "competitive" rate for businesses, even if not at the 15 percent bracket backed by President Donald Trump, he said.

The Dow Jones Industrial Average rose 61.49 points, or 0.28 percent, to 22,118.86. The S&P 500 gained 8.37 points, or 0.34 percent, to 2,496.48 and the Nasdaq Composite added 22.02 points, or 0.34 percent, to 6,454.28.

The pan-European FTSEurofirst 300 index rose 0.54 percent to close at 1,499.27. MSCI's index for emerging market stocks rose 0.31 percent.

European insurance companies rose again, climbing 0.8 percent.

The market mood was "risk-on," said Pierre Martin, a trader at Saxo Bank, adding the positive trend for banking stocks and automobile shares showed investors were keen on corporate and macroeconomic news rather than geopolitical and Irma worries.

U.S. long-dated Treasury yields hit two-week highs, rising for a third straight session, while Germany's benchmark 10-year bond yield rose sharply and was set for its biggest daily rise since early July.

The benchmark 10-year U.S. Treasury note fell 11/32 in price to yield 2.1637 percent. German Bunds fell 7 basis points in price to push yields up 0.403 percent.

The greenback found support as investors further unwound bearish bets against it. The dollar index, which tracks the currency against a basket of six major rivals, rose 0.07 percent, while the euro added 0.08 percent to $1.1961.

The Japanese yen weakened 0.68 percent versus the greenback at 110.15 per dollar.

Oil prices rose after OPEC forecast higher demand in 2018 and said output fell in August, signs that its production-cutting deal with non-member countries may reduce a supply glut.

The Organization of the Petroleum Exporting Countries also said the two hurricanes that have hit the United States in recent weeks would have a "negligible" impact on demand.

U.S. crude rose 16 cents to settle at $48.32 a barrel and Brent settle up 43 cents at $54.27 a barrel.

U.S. gold futures fell 0.04 percent to $1,335.10 an ounce.

(Reporting by Herbert Lash; Editing by Nick Zieminski and Dan Grebler)