GLOBAL MARKETS-Shares rise on European talks hope; euro dips

* Equities up on hope Wednesday meeting to tackle debt crisis

* Skepticism over deal pressures euro; dollar rises

* Bond prices slip as investors doubt outcome (Updates prices)

By Herbert Lash

NEW YORK, May 22 (Reuters) - World shares gained for a second consecutive day o n T uesday on hopes European leaders will tackle the region's debt crisis, but the euro fell on doubts that much would come of a meeting just a day away.

European shares gained almost 2 percent while bond prices slid on both sides of the Atlantic over optimism European leaders may devise new measures to foster growth in the euro zone and restore a doubtful market's confidence.

An informal summit of European Union leaders late on W ednesday is expected to discuss the idea of regional bonds jointly underwritten by all euro zone member states.

However, Germany's long-standing opposition is unlikely to change; the country has dismissed the French-led call for the euro zone to issue common bonds.

"The string of summit meetings that have been called to address the euro crisis thus far have more often than not failed to live up to market hopes for quick and decisive action and this one will be no exception," said Shaun Osborne, chief currency strategist at TD Securities in Toronto.

U.S. stocks pared some gains late in the session after a rise in sales of existing U.S. homes to their highest annual rate in nearly two years in April and a decline in foreclosures pushed housing prices higher, adding to a positive tone.

The National Association of Realtors said existing home sales increased 3.4 percent to the highest annual rate since May 2010, while the median price nationwide jumped to $177,400, up 10.1 percent from a year earlier.

"We're still a ways from looking at an encouraging picture of the U.S. economy, though when it comes to housing, every little bit helps," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto.

The Dow Jones industrial average was up 38.78 points, or 0.31 percent, at 12,543.26. The Standard & Poor's 500 Index was up 5.48 points, or 0.42 percent, at 1,321.47. The Nasdaq Composite Index was up 2.98 points, or 0.10 percent, at 2,850.19.

Banking shares led the rally, with four of the top five contributors to the S&P 500's rise being JPMorgan Chase & Co , Wells Fargo Corp, Citigroup Inc and Bank of America. The KBW banking index rose 1.8 percent.

The FTSE Eurofirst index of top European shares rose 1.9 percent to close at 993.67, extending a recovery from five-month lows hit on Mo nday.

MSCI's all-country global equity index was up 0.8 percent to 303.77.

The euro fell amid skepticism Wednesday's talks would yield much progress. The euro was down 0.8 percent against the dollar at $1.2713. The dollar index rose 0.5 percent to 81.503 , rising after three days of losses.

The dollar was boosted in part by a fall in the yen after Fitch ratings agency downgraded Japan on worries about its high level of public debt.

"Tomorrow's meeting will not deliver any landmark solution. The market is likely to be more prone to disappointment," said Matteo Regesta, a strategist at BNP Paribas.

"There's this delusion of a quick fix either via monetary policy with the European Central Bank or via some kind of fiscal decision, but unfortunately this won't happen," Regesta said.

The benchmark 10-year U.S. Treasury note was down 13/32 in price to yield 1.79 percent.

The June Bund future settled 48 ticks lower at 143.09, while German 10-year yields rose 5 basis points to 1.48 percent.

Brent crude, which had earlier risen to over $109 a barrel, eased on signs of a deal with Iran to boost its cooperation over investigating its nuclear program.

Major powers will meet with Iran on Wednesday to discuss its nuclear program after the U.S. Senate on Monday unanimously approved a package of economic sanctions on the country's oil sector.

Brent fell 34 cents to $108.47 a barrel, while U.S. light sweet crude oil fell $1.05 to $91.49 a barrel.

The Reuters/Jefferies CRB Index was down 1.0 percent at 286.81.

(Editing by Dan Grebler)