* MSCI world equity index slips, Wall Street down
* Oil prices retreat as U.S. dollar strengthens
* Euro reverses gains versus dollar, eyes on Greece (Updates prices, adds details, comments)
By Wanfeng Zhou
NEW YORK, May 13 (Reuters) - Major stock markets fell on Friday after data showed U.S. inflation hit the highest level in 2-1/2 years, while the euro slipped against the dollar as investors refocused on Europe's debt problems ahead of meetings by finance officials next week.
The rise in the dollar dragged down crude oil prices, reversing earlier gains that had been fueled by stronger-than-expected economic growth data from Germany and France.
U.S. consumer prices increased 0.4 percent in April from March after rising 0.5 percent in March. The rise, which was in line with economists' expectations, took the year-on-year inflation reading to 3.2 percent, the highest since October 2008. For details, see [ID:nN13186747]
"CPI was right in line, net benign, but people are concerned we're still going to have to deal with inflation," said Ken Polcari, managing director at ICAP Equities in New York. "People are going to take advantage and reallocate some assets, build a more defensive type portfolio."
World stocks, as measured by the MSCI world equity index <.MIWD00000PUS>, fell 0.6 percent to 344.39 on the day, not far from a three-week low set on Thursday. Thomson Reuters global stock index <.TRXFLDGLPU> dropped 0.6 percent.
The Dow Jones industrial average <.DJI> dipped 74.97 points, or 0.59 percent, to 12,619.14. The Standard & Poor's 500 Index <.SPX> edged down 7.88 points, or 0.60 percent, to 1,340.60. The Nasdaq Composite Index <.IXIC> lost 22.02 points, or 0.76 percent, to 2,841.16.
The pan-European FTSEurofirst 300 <.FTEU3> index of top shares was down 0.4 percent at 1,140.07 points. Emerging stocks <.MSCIEF> lost 0.3 percent.
The euro traded down against the dollar, as investors' anxiety increased ahead of meetings that could provide further direction to the single currency [ID:nLDE66D1JB]. The euro is likely to remain pressured until at least after investors digest any outcome.
The euro fell 0.5 percent to $1.4169
Concerns that Greece won't repay private bondholders in full have contributed to the currency shedding roughly 5 percent from a peak near $1.4940 hit in early May.
A Eurogroup meeting of euro zone finance ministers is due to be held on Monday, followed on Tuesday by a meeting of European Union finance ministers. [ID:nLDE66D1JB]
There are doubts whether a substantial agreement to help Greece manage its debts is likely to emerge from the meetings, keeping uncertainty high over how long the country can avoid a restructuring and making some investors reluctant to load up too much on risky assets, analysts said.
"Ahead of event risk, we're getting some anxiety ahead of the weekend," said Jessica Hoversen, foreign exchange and fixed income analyst at MF Global in New York. "It's risk off, which is unfortunately simplistic but seems to explain the movements of all the markets lately."
In commodities markets, U.S. crude oil