GLOBAL MARKETS-U.S. stocks lose gains after German bomb scare; oil drops

* Dollar hits 7-month high as inflation data backs rate hike

* European shares jump after strong corporate reports

* Prices of long-dated U.S (Other OTC: UBGXF - news) . Treasuries rise

* Copper struggles at 6-year lows on China demand woes (Updates with close of U.S. markets)

By Lewis Krauskopf

NEW YORK, Nov 17 (Reuters) - U.S. shares ceded gains on Tuesday after a soccer match in Germany was called off over fears of a planned bomb attack, while prices of longer-dated U.S. Treasuries rose on demand for low-risk government bonds.

Oil prices fell sharply as worries returned about a glut of supplies, which also undercut equities. The U.S. dollar rose to a seven-month high as inflation data bolstered expectations of an impending interest rate hike.

Just days after the deadly attacks in Paris, a soccer game between Germany and the Netherlands in Hanover, Germany was called off less than two hours before its start due to what authorities called the credible threat of an attack with explosives.

"These situations create uncertainty and in uncertain times everyone goes to cash," said Mohannad Aama, managing director at Beam Capital Management LLC in New York.

The Dow Jones industrial average rose 6.49 points, or 0.04 percent, to 17,489.5, the S&P 500 lost 2.75 points, or 0.13 percent, to 2,050.44 and the Nasdaq Composite added 1.40 points, or 0.03 percent, to 4,986.02.

Earlier in the day, U.S. stocks had registered strong increases, fueled by better-than-expected results from retailers Home Depot (Swiss: HD.SW - news) and Wal-Mart Stores.

In Europe, the FTSEurofirst 300 index surged 2.6 percent, as Germany's United Internet (Other OTC: UDIRF - news) and Dutch-based Randstad, the world's second-biggest staffing company, posted encouraging results.

MSCI (NYSE: MSCI - news) 's all-country world index rose 0.6 percent.

"Overall, there is a macro tailwind for European equities," said Lorne Baring, managing director of B Capital Wealth Management. "The monetary policy of the (European Central Bank) will continue to weaken the euro versus other major currencies."

Greek stocks surged and bond yields hit their lowest in more than a year after the country's finance minister said Athens had reached an agreement with its lenders on financial reforms.

Data on Tuesday showed U.S. consumer prices increased in October after two straight months of declines, a sign of firming inflation that supported expectations the Federal Reserve will raise interest rates next month.

The dollar index, which measures the dollar against a basket of six major currencies, rose 0.2 percent, although weaker-than-expected industrial output data pared the greenback's gains later in the session. The euro lost 0.4 percent against the dollar, hitting a 7-month low.

"I think the market has the mindset that there is almost nothing at this stage of the game that is going to dissuade the Fed from going in December," said Lane Newman, director of foreign exchange at ING Capital Markets in New York.

Benchmark 10-year Treasuries rose 1/32 in price with a yield of 2.2693 percent. Prices on the 30-year bond rose 11/32 with a yield of 3.0543 percent.

"There are a lot of reasons to be nervous and for a flight-to-safety (to bonds)," said Lou Brien, market analyst at DRW Trading in Chicago.

Oil prices slumped as the global oversupply in crude and petroleum products returned to focus. Brent crude futures settled down 99 cents at $43.57 a barrel, touching a session low at $43.50. U.S. crude futures settled down $1.07 at $40.67 a barrel.

The declines reversed a crude rally on Monday on security fears related to Friday's attacks in Paris and France's bombing of Islamic State targets in Syria in the aftermath.

Gold (Other OTC: GDCWF - news) fell 1.2 percent, heading back around six-year lows.

Copper prices touched their lowest point in more than six years as fears about demand in China and a higher dollar fueled negative sentiment. (Reporting by Lewis Krauskopf, Additional reporting by Dion Rabouin, Richard Leong and Barani Krishnan in New York, Noel Randewich in San Francisco, Abhiram Nandakumar in Bengaluru, Jemima Kelly and Atul Prakash in London; Editing by Nick Zieminski and Tom Brown)