Comments regarding a rebound in the Chinese economy from the Organization for Economic Cooperation and Development lifted stocks early on Tuesday and kept Asian and European bourses in the green. The comments came after Chinese Prime Minister Wen Jiabao said his government would focus more on growth than inflation.

However, the OECD also reduced its euro zone growth forecast and warned the debt crisis could end up sending the region's economy into a tailspin if the right measures aren't implemented. Fitch Ratings also downgraded Japan to AA saying the country wasn't working fast enough to fix a sluggish economy.

Existing U.S. home sales in April were the highest in two years -- which helped boost banks and construction stocks -- but U.S. central Atlantic region manufacturing activity is slowing this month, the Federal Reserve Bank of Richmond said. Businesses in the region that participated in the bank's survey were optimistic about the next six months.

Investors ended the day looking toward Wednesday's informal European Union summit where financial ministers will wrangle with the subject of a unified euro bond -- Germany opposes it; France supports it -- but will likely all agree that Greece must stay in the currency bloc.

Stocks. U.S. stocks ended the day relatively flat after spending most of the day in the green following the momentum in European bourses. There was a sharp decline near the close which was quickly overcome, but all three U.S. exchanges managed to keep much of Monday's gains. The gyrations in U.S. markets toward the end of the day may have been linked to a meeting between Greece's caretaker government and the cabinet ahead of the EU summit.

Bonds. The benchmark 10-year U.S. Treasury yield touched over 1.80 percent for the first time since May 16 and demand declined on the stock rally. The positive momentum in European stocks helped pull Italian and Spanish bonds back from recent highs in the cost of borrowing; in Spain's case a euro zone record for the widest spread between the benchmark Spanish 10-year-bond and its German counterpart. 

Currencies. The Japanese yen against the dollar weakened the most in a month as the Bank of Japan started its two-day meeting. Speculation abounds that more stimulus was in the works to stimulate a sluggish economy, especially in light of the Fitch downgrade. Meanwhile JPMorgan Chase predicted the dollar would strengthen against all major currencies except the yen in the second quarter. The euro continued to be under pressure, losing a percent and dipping again below €1.27 against the dollar.

Commodities. Crude oil for June delivery shed 1.22 percent. Copper and gold for May delivery were also down less than a percent. Palladium for May delivery shot up nearly 8 percent while platinum gained more than 4 percent. Silver for May delivery increased more than 2 percent.