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* World equity index recovers from early falls, Home Depot buoys U.S. stocks
* Euro recovers from more than two-month low versus dollar
* Brent oil slips as investors worry over global demand
By Ellen Freilich
NEW YORK, Nov 13 (Reuters) - World stocks rose on Tuesday after U.S. markets turned higher, fueled by strong results from home improvement retailer Home Depot, while the euro rose from a more than two-month low against the dollar.
Global share prices had come under pressure earlier after international lenders clashed over help for Greece, stoking fears the country's debt crisis could flare up anew.
European shares erased losses as a fresh round of trader speculation that Spain may be close to asking for a sovereign bailout fueled appetite for financial shares.
"Gains on Spain shares are leading Europe higher as rumors of an imminent acceptance of a bailout are reportedly spreading once again," Action Economics told clients.
Euro zone finance ministers suggested that Greece, where the euro zone debt crisis began, should be given until 2022 to lower its debt-to-GDP ratio to 120 percent. But the head of the International Monetary Fund, Christine Lagarde, insisted the existing target of 2020 should remain.
"We clearly have different views. What matters at the end of the day is the sustainability of Greek debt so that country can be back on its feet," Lagarde said late on Monday, in an unusually public airing of a disagreement that has rumbled for weeks behind closed doors.
The MSCI world equity index rose 0.01 percent to 322.81, after hitting its lowest point since early September.
The Dow Jones industrial average was up 29.57 points, or 0.23 percent, at 12,844.65. The Standard & Poor's 500 Index was up 3.99 points, or 0.29 percent, at 1,384.02. The Nasdaq Composite Index was down 3.29 points, or 0.11 percent, at 2,900.97.
Shares of Dow component Home Depot Inc, the world's largest home improvement retailer, climbed 4.3 percent to $63.78 after it reported earnings that beat expectations and raised its outlook, citing an improved housing market.
The FTSEurofirst 300 pan-European index closed up 4.81 points, or 0.44 percent, at 1,099.16. Spain's IBEX index rallied 1.7 percent, while its bond yields eased slightly <ES10YT=RR, amid speculation Spain might be close to asking for a sovereign bailout.
The euro slid as low as $1.2660 on Reuters data, the weakest since Sept. 7, before recovering to $1.2707, up slightly on the day.
The euro trimmed losses after a German newspaper said Germany wants to bundle Greek aid into a single payment of more than 44 billion euros.
Traders interpreted the report, which cited government sources, as a sign that Germany, the euro zone's largest and strongest economy, was eager to see a deal done. Asked about the report, a German Finance Ministry spokeswoman said no final decision had been made on Greek loans.
Analysts said the euro remained vulnerable to uncertainty about Greece after euro zone finance ministers on Monday held off disbursing more aid to the debt-ridden country. Another meeting of the finance ministers is to take place on Nov. 20.
"There is quite a long list of worries at the moment, with the overall backdrop risk-negative," said Vassili Serebriakov, foreign exchange strategist at BNP Paribas in New York.
"There is no Greece resolution and it looks like some of the critical details for receiving more aid have been pushed to the end of this month," he said.
Brent crude oil lost $1.22 to $107.85 a barrel, falling for a second day on worries about demand growth in a well-supplied market as the United States and Europe grapple with fragile economies.
U.S. crude futures fell 43 cents to $85.14.
The International Energy Agency, which advises industrialized nations on energy policy, issued a bearish report on Tuesday, showing improving supply, more limited increases in demand and rising global inventories.
Spot gold was down slightly at $1,727.10 an ounce.
Concern about Greece and the U.S. "fiscal cliff" drove safe-haven U.S. Treasury debt higher. The benchmark 10-year U.S. Treasury note was up 4/32, with the yield at 1.60 percent .
Though U.S. stocks were in the plus column, investors were said to be fretting about possible political brinkmanship by Democrats and Republicans over the $600 billion in spending cuts and tax hikes due to come into effect early next year.
Thomas Gallagher, consultant on public policy to the Morgan Stanley Smith Barney Global Investment Committee, said in an investment outlook on Tuesday that odds favored a compromise between President Barack Obama and Republicans in the House of Representatives.
"No one wants to be responsible for putting the economy back into a recession," he said. "It makes sense for the Republicans to act now. Early signs are encouraging."