Equity investors dipped a toe back into the water after taking a bath on Monday as they pondered the future of Europe and its impact on the global banking system.
Britain's FTSE 100 rose 0.9 per cent, France's CAC 40 gained 1 per cent and Germany's DAX rose 1.1 per cent. Hong Kong's Hang Seng rose 0.1 per cent, while Japan's Nikkei dipped 0.4 per cent.
Dow futures rose 54 points, or 0.5 per cent, to 11,579 about two and a half hours before the New York Stock Exchange opened. S&P 500 futures rose 7.7 points, or 0.7 per cent, to 1,198.40.
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The U.S. dollar lingered near a six-week high against a basket of currencies. The Canadian dollar was little changed at 96.44 U.S. cents, while the euro traded at $1.3547 (U.S.).
German Bund futures slipped, taking a breather after a full point rally the previous day.
French bonds continued to reflect signs of investor concern. The extra yield demanded to lend to AAA-rated France for 10 years was 155 basis points more than the German rate, a gap that hit a record 200 basis points last week, up from 28 in April. France pays almost twice as much to borrow on the bond markets as Germany.
Spain paid the highest yields in 14 years to issue short-term bills. The Treasury raised 2.978-billion euros in an auction of three- and six-month bills but had to offer yields of more than 5 per cent, compared with 2.3 per cent at a previous comparable sale on October 25. Spain's debt risk premium over German bonds hovered at 4.66 percentage points.
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Jefferies Group Inc. became the latest bank to cut its exposure to European debt, saying late on Monday it had reduced gross exposure to Greece, Ireland, Italy, Portugal and Spain by a total of nearly 75 per cent since worries first surfaced in early November.
Gold recovered, rising $19.80 to $1,698.40 an ounce.
Copper gained 1.5 per cent to $3.35 a pound.
U.S. crude oil rose $1.22 to $98.14 a barrel.