LONDON (AP) ? Global markets rose Tuesday on signs of improvement in the U.S. housing market and on hopes China will act to support growth in its economy, the world's second-largest.
A survey by S&P/Case Shiller showed home prices rose in major U.S. cities in March for the first time in seven months. Combined with record low mortgage rates and a steady improvement in the labor market, the report suggested that the U.S. property market ? which was at the heart of the global financial crisis in 2008 ? is strengthening.
"With the economic recovery now on firmer ground, we see no reason to alter our view that U.S. house prices have now found a floor," said Ed Stansfield, chief property economist at Capital Economics.
The figures helped offset the impact of a more downbeat report showing U.S. consumer optimism fell in May to the lowest in eight months. The Conference Board said its Consumer Confidence Index fell to 64.9 points, below analyst expectations.
In Europe, Britain's FTSE 100 was up 0.4 percent to 5,376.42 while Germany's DAX rose 1.1 percent to 6,393.20. The CAC-40 in Paris rose 1.1 percent to 3,076.35. The euro was up marginally at $1.2547.
Wall Street opened higher after a three-day weekend for Memorial Day holiday, with the Dow and S&P 500 both rising 1.1 percent, to 12,584.93 and 1,331.97, respectively.
Earlier, markets had been unsettled by concerns that Spain's ailing banking sector might worsen the European debt crisis.
The country's banks are sitting on massive amounts of soured real estate investments. That has led to the recent nationalization of Bankia, the country's fourth-largest lender, which revealed last week it needed more money than expected ? ?19 billion ($23.8 billion) ? in state aid to shore itself up.
Investors fear that the Spanish government, which is already under pressure to lower its debts at a time of recession and record-high unemployment, will be overwhelmed by the cost of saving the country's banking sector.
Those concerns kept pressure on Spain's Ibex, which was down 2.1 percent, with shares in Bankia dropping another 13.6 percent.
The latest bad news to hit the country was a report showing retail sales were down 9.8 percent in April in year-on-year terms, more than double the 3.8 percent fall posted in March.
The figures underlined the brutal impact that government austerity cuts and economic uncertainty are having on households. They also bolster the case for Europe to find new ways to bolster economic growth, though leaders disagree over how to achieve that.
Years of financial and economic uncertainty ? first in the global credit crunch and now in the debt crisis ? have hammered public confidence in the future of European integration, according to a survey by Pew Research across eight European Union countries, including five that use the euro.
"This crisis of confidence is evident in the economy, in the future, in the benefits of European economic integration, in EU membership, in the euro and in the free market system," Pew said in a statement accompanying its survey.
Despite those headwinds, Pew found there was no desire for those countries that use the euro to abandon the single currency.
Europe's debt crisis will remain a dominant theme for markets for weeks to come as investors gauge the likelihood that Greece might leave the eurozone after elections on June 17. If Greeks vote for parties that support the country's bailout terms, ensuring a continued flow of rescue loans, the country will hope to stay in the eurozone.
The pro-bailout parties hold a narrow lead, according to the latest polls, but uncertainty over the ultimate outcome of the elections will keep market sentiment fragile and prone to swings in mood.
Earlier in Asia, stock indexes rose on hopes that China will relax monetary policy and announce fiscal stimulus measures to offset slowing economic growth.
"This has been a predominant theme since Premier Wen Jiabao's comments showing commitment to keep China's growth from stalling," said Stan Shamu, market strategist at IG Markets.
Japan's Nikkei 225 index rose 0.7 percent to close at 8,657.08 and Hong Kong's Hang Seng gained 1.4 percent to 19,055.46. South Korea's Kospi climbed 1.4 percent after being closed Monday for a public holiday while China's benchmark Shanghai Composite Index rose 1.2 percent.
Benchmark oil for July delivery was up 80 cents to $91.66 a barrel in electronic trading on the New York Mercantile Exchange.
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Pamela Sampson in Bangkok and Fu Ting in Shanghai contributed to this report.
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