The world's stock markets rebounded slightly Tuesday on hopes that governments are looking at fresh efforts to solve Europe's debt crisis.
Finance ministers and central bank governors from seven of the world's most industrialized powers held an emergency conference call Tuesday to discuss the crisis hitting the 17-countries that use the euro. After the G7 call, the U.S. Treasury Department said that the finance officials agreed to keep monitoring developments closely in the run-up to a leaders' summit of the Group of 20 major economies on June 18-19 in Los Cabos, Mexico.
Stock indexes rose gingerly on the news with several markets in Europe and the U.S. adding to their earlier cautious gains.
France's CAC-40 rose 1.07 percent to 2,967 while Germany's DAX retreated very slightly by 0.5 percent to 5,969, while. Markets in London were closed for a second day for the Queen's Jubilee celebrations.
Concerns about Europe _ and particularly the worry that the sorry state of Spain's banks may force the country to seek a bailout _ have increasingly weighed on the economies of both the U.S. and the countries that use the euro. Spain, strapped for cash, might have to tap European Union rescue funds, but it is reluctant to do so because such aid would come with strict conditions.
The crisis has stopped a nascent U.S. economic recovery in its tracks and refused to let Europe get off the ground. U.S. factory orders fell back on Monday, dovetailing with the recent weak jobs data, while a European business survey sounded a dismal note Tuesday. Markit's Purchasing Managers' Index for the eurozone hit a near-three-year low in May. Even Germany was below the 50 mark, which indicates a contraction.
The major indexes on Wall Street also edged higher after opening. The Dow Jones industrial average was up 0.35 percent to 12,103. The Standard & Poor's 500 rose 0.25 percent to 1,281 while the Nasdaq composite was up 0.2 percent to 2,765.
"The eurozone is being buffeted by major headwinds, notably including increased fiscal tightening in many countries, squeezed consumer purchasing power and markedly rising unemployment," said Howard Archer, chief European economist for IHS Global Insight.
"Meanwhile, the heightened Greek and Spanish tensions are magnifying the problems by weighing down on already weak and fragile business and consumer confidence, adding to uncertainty about the outlook and holding back business and investment decisions."
The euro clawed back some of its earlier losses but was still down 0.5 percent to $1.2435.
Earlier in Asia, stock markets rose following a move by Chinese authorities to boost consumption.
Japan's Nikkei 225 index rose 1 percent to 8,382 after suffering sharp losses the day before. Hong Kong's Hang Seng added 0.4 percent to 18,259.03 and South Korea's Kospi gained 1.1 percent to 1,801.85.
Mainland Chinese shares were mixed. The benchmark Shanghai Composite Index gained 0.2 percent to 2,311.92. The Shenzhen Composite Index lost 0.2 percent to 937.39.
Energy prices also made up some of their lost ground after earlier falls on expectations demand would be hit. Benchmark oil for July delivery rose 2 cents to $84.02 per barrel in electronic trading on the New York Mercantile Exchange.
Associated Press Business Writer Pamela Sampson contributed to this report from Bangkok.