By Lewis Krauskopf
NEW YORK (Reuters) - World stock markets rallied on Tuesday as oil prices climbed and companies reported solid earnings, while the yen again retreated against the dollar.
MSCI's broad gauge of global stocks (MIWD00000PUS) climbed 0.9 percent, on pace for its best session in three weeks. The U.S. benchmark S&P 500 gained 0.9 percent and the pan-European FTSEurofirst 300 (FTEU3) index advanced 0.8 percent.
The yen fell against the dollar for a second day as a key Japanese economic adviser reiterated that the country was prepared to intervene in currency markets.
But against a basket of currencies, the dollar was little changed, helping to steady oil and other commodities denominated in the greenback.
The Dow Jones industrial average (DJI) was rising 172.68 points, or 0.98 percent, at 17,878.59, the S&P 500 (SPX) was gaining 18.28 points, or 0.89 percent, at 2,076.97 and the Nasdaq Composite (IXIC) was adding 31.65 points, or 0.67 percent, at 4,781.86.
"I’d probably say it’s the currency fluctuations that are influencing the market in the short term," said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina.
Allergan (N:AGN) shares propped up the S&P 500 after the U.S. pharmaceutical company posted strong earnings. Results from Credit Suisse (S:CSGN) and jewelry maker Pandora (CO:PNDORA) helped the European index.
"The market has been resilient and has offered the opportunity for the buyers of the pullback to capitalize on it and that's why we're seeing a move back into equities," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey.
Greek shares (ATG) hit their highest level in 2016 after euro zone finance ministers offered to grant Greece some debt relief, with the move causing Greek 10-year bond yields
The yen slid 0.7 percent against the dollar as risk appetite improved for a second straight session, undermining traditional safe havens such as the Japanese currency. Repeated verbal warnings from Japan over the weekend and on Tuesday saying it was prepared to step in to weaken the currency has also held off investors.
Oil prices rose as supply disruptions of 2.5 million barrels per day in Canada and elsewhere offset concerns about growing record high U.S. crude stockpiles.
U.S. crude (CLc1) gained 2 percent to 444.30 a barrel, while benchmark Brent crude (LCOc1) rose 3.2 percent to $45.03 a barrel. Oil prices have recovered some ground after touching 12-year lows earlier in 2016.
U.S. Treasuries were steady before the government was due to sell $24 billion in three-year notes.
Benchmark 10-year notes (US10YT=RR) gained 1/32 in price on Tuesday to yield 1.7578 percent, down from 1.76 percent on Monday.