NEW YORK Major stock markets rose on Tuesday, with the U.S. S&P 500 index nearing its all-time high, while the dollar rallied from a one-month low against the yen on bets the Bank of Japan will announce further monetary easing this week.
Gold fell to a 2-1/2-week low, pressured by the strengthening dollar and as investors moved away from safe havens and bought stocks. Other commodities also retreated, with copper falling to a seven-month low on worries about global economic growth.
Investors looked toward policy meetings this week of the Bank of Japan and the European Central Bank, along with the U.S. government's release on Friday of its payrolls report for March.
On Wall Street, stocks rebounded after declining on Monday. Healthcare shares surged on brighter earnings prospects as the U.S. government dropped plans to decrease payments for private Medicare Advantage insurers, opting instead to raise them by 3.3 percent.
"Given how lean these companies are, this news is pretty significant and could mean a 10 to 15 percent increase in earnings," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
News that Cyprus concluded bailout talks added to the gains.
The Dow Jones industrial average .DJI gained 89.16 points, or 0.61 percent, to 14,662.01. The Standard & Poor's 500 Index .SPX rose 8.08 points, or 0.52 percent, to 1,570.25. The Nasdaq Composite Index .IXIC added 15.69 points, or 0.48 percent, to 3,254.86.
The S&P 500 set an all-time closing high last week, but has stayed shy of its intraday record of 1,576.09.
European shares rallied after a two-week slide, boosted by Vodafone on rumors of a multi-billion-pound break-up bid for the UK telecoms group. Europe's FTSEurofirst 300 index .FTEU3 gained 1.3 percent to end at 1203.79 points.
The broad MSCI world equity index .MIWD00000PUS rose 0.4 percent to 359.84 points.
The dollar rose 0.2 percent to 93.39 yen. The BoJ begins a two-day meeting on Wednesday and is widely expected to ramp up its bond buying and to extend the maturities of the bonds it purchases under its new governor, Haruhiko Kuroda.
The euro fell 0.2 percent to $1.2816 after Markit's Euro zone Manufacturing PMI fell in March to 46.8 from 47.9 in February, the 20th straight month that the index has come in below the 50 mark that separates growth and contraction.
The data boosted expectations that European Central Bank President Mario Draghi will strike a more dovish tone at the ECB's monetary policy outlook meeting on Thursday and could provide hints about a possible rate cut.
"We expect euro zone fundamentals to deteriorate further. This, combined with outflow pressures, should keep the euro's downward trend intact," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto.
Spot gold hit an intraday high of $1,603.60 an ounce before falling to $1,575 an ounce, down from $1,598.40 on Monday. It hit an intraday low of $1,573.39, its lowest price since March 8.
"The hot money is going toward the S&P 500 right now," said Jeffrey Sica, chief investment officer of SICA Wealth Management, which oversees more than $1 billion in assets.
"There is an overwhelming sentiment that growth will remain slow and not inflationary, and that has eliminated some of the momentum investors in gold," Sica said.
Benchmark copper on the London Metal Exchange hit a session low of $7,439 a metric ton (1.1023 tons), its weakest since August 21, and closed at $7,465 a metric ton. Disappointing manufacturing data from the euro zone, the United States and China stoked demand worries for the metal, which is used in power and construction.
Silver dropped almost 3 percent to an eight-month low, and platinum group metals declined sharply.
Oil prices declined as ample supplies and concerns over the pace of economic recoveries in the United States and Europe outweighed the prospect of stronger demand in Asia.
Brent slid 39 cents to settle at $110.69 a barrel. U.S. crude rose 12 cents to settle at $97.19 a barrel.
Safe-haven government debt prices also declined. Benchmark 10-year Treasury notes were down 8/32, their yields rising to 1.862 percent from 1.84 percent on Monday. German Bund futures also fell.
(Additional reporting by Ryan Vlastelica, Gertrude Chavez-Dreyfuss and Frank Tang in New York; Editing by Leslie Adler)