Early gains in U.S. stocks came as purchases of new U.S. houses rose in April to the highest level so far this year after plunging to a record low two months earlier. Sales climbed 7.3 percent to a 323,000 annual pace last month, figures from the Commerce Department showed. The median estimate in a Bloomberg News survey of economists was for sales at a 300,000 annual rate. Housing prices rose from a year earlier.

The S&P 500 climbed to an almost three-year high on the final trading day of April. It has slumped 3.5 percent since, while 10-year Treasury yields reached their lows for the year last week, as economic data missed economists' estimates and investors prepared for the Federal Reserve to complete its $600 billion bond-purchase program at the end of June. Still, the benchmark has increased almost 5 percent this year amid government stimulus measures and improving earnings.

'Arousing The Bears'

Barton Biggs, the hedge fund manager who bought stocks when the market bottomed in March 2009, said he remains bullish on U.S. equities and likes industrial stocks even though the global economy has slowed. He favors companies such as Caterpillar Inc. and Deere & Co. because their earnings growth continues to exceed expectations and demand for farming and construction equipment remains strong.

"The U.S. and the global economy have clearly slowed pretty significantly," Biggs, who runs New York-based Traxis Partners LP, said in a Bloomberg Surveillance radio interview with Tom Keene. "That's arousing the bears, who believe we're going to slip back into a long soft patch at best or maybe even a double-dip at worst," he said. "For a number of reasons I don't think that's right."

The Stoxx Europe 600 Index rose 0.2 percent, recovering some of yesterday's 1.7 percent decline. Hellenic Telecommunications Organization SA and Hellenic Postbank SA climbed more than 4.3 percent as the Greek government said it will step up plans to sell its holdings in the companies. Renewable Energy Corp. ASA tumbled 17 percent after saying it will reduce output of wafers, cells and modules in response to current market conditions.

Note Auction

Two-year Treasury notes gained after the U.S. sold $35 billion of the securities. The two-year note yield slipped two basis points to 0.51 percent following the first of three Treasury auctions this week totaling $99 billion.

The securities drew a yield of 0.560 percent, compared with the average forecast of 0.562 percent in a Bloomberg News survey of nine of the 20 primary dealers obliged to participate in U.S. debt offerings. The bid-to-cover ratio, which gauges demand by comparing total bids with amount of securities offered, was 3.46, compared with 3.06 last month and an average of 3.38 at the past 10 sales.

The MSCI Emerging Markets Index gained 1 percent, rebounding from its biggest slide in 11 months yesterday. Russia's Micex Index rose 1.6 percent as OAO Gazprom, the country's gas-export monopoly, climbed on an increased share- price estimate by Goldman. The Shanghai Composite Index slipped 0.3 percent, leaving the gauge 9.5 percent below this year's high, on concern the government's measures to curb inflation are slowing growth.

Euro Gains