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Oil eased after the International Energy Agency revised down its forecast for growth in consumption due to the struggling global economy.

Global markets have been roiled since the end of July by the twin fears of renewed recession in the United States and Europe's protracted debt woes, which have seen bailouts for Greece, Ireland and Portugal and sparked fears of a new banking crisis.

"Developments in Europe are sending mixed signals, and this will likely keep investors at bay," said Y.S. Rhoo, a market analyst at Hyundai Securities.

Japan's Nikkei share average .N225 inched up 0.2 percent, but MSCI's broadest index of Asia Pacific shares outside Japan .MIAPJ0000PUS fell 0.3 percent, with South Korean shares .KS11 losing more than 1 percent.

The MSCI index is now more than 20 percent below its 2011 high reached in April. A decline of 20 percent or more is the rule-of-thumb definition of a bear market.

U.S. stocks rose on Tuesday, with the S&P 500 .SPX up 0.9 percent, amid hopes that European leaders would take action soon to ease the two-year-old sovereign debt crisis.

Markets had been spooked in recent days by renewed talk among euro zone policymakers of a default by Greece, prompted by the country's failure to meet the fiscal goals set out in its EU/IMF bailout.

Greek, German and French leaders were due to hold a conference call at 1600 GMT on Wednesday.

"The conference call will at least calm nerves ... and may provide 24 hours of reprieve. That's about it, though," said Sean Callow, a senior currency strategist at Westpac.

The euro was steady around $1.3690, having jumped more than a cent in the previous session on news of the conference call.

The single currency tumbled to a seven-month trough of $1.3499 earlier this week.

The dollar index .DXY inched up 0.1 percent against a basket of major currencies.

Gold rose 0.3 percent to around $1,837 an ounce, while U.S. crude oil edged down 0.1 percent to around $90.10 a barrel.

(Reporting by Alex Richardson; Editing by Ed Lane)

ICSC/Goldman Sachs release chain store sales for the week ended September 10 versus the prior week at 1145 GMT (7:45 a.m. ET). In the previous week, sales fell 0.7 percent.

Hewlett-Packard (HPQ.N) has extended the deadline for its $11.2 billion takeover offer for British software company Autonomy (AUTN.L) to October 3 after gaining acceptances from only 41.6 percent of shareholders at the first closing date.

At 1230 GMT (8:30 a.m. ET), the Labor Department releases import-export prices for August. Economists forecast a 0.8 percent drop in import prices and a flat reading in export prices. In the prior month, import prices rose 0.3 percent and export prices dropped 0.4 percent.

U.S. conglomerate General Electric Co (GE.N) hopes to double the company's German business in five years through a combination of organic and inorganic growth, a company executive told the Wall Street Journal in an interview.

Redbook releases its Retail Sales Index of department and chain store sales for September versus August at 1255 GMT. In the prior period, sales rose 0.4 percent.

Blackstone Group's (BX.N) Ben Jenkins, a senior managing director and the firm's former top Asia dealmaker, is leaving the firm and returning to New York after four years in the region, two sources said.

Investor's Business Daily and TechnoMetrica Market Intelligence release the IBD consumer confidence index for September at 1400 GMT. The index read 35.8 in August.

At 1800 GMT, the Treasury Department issues monthly budget for August. Economists forecast a $132.0 billion deficit compared with a budget deficit of $129.4 billion in July.

Best Buy (BBY.N) is scheduled to announce quarterly results.

European shares rose in early trade on reports that Italy has asked China to make "significant" purchases of Italian debt, but fell later on concerns that it was not a long-term solution for the euro zone debt crisis. The FTSEurofirst 300 .FTEU3 index of top European shares was down 1.2 percent.

The euro zone's leaders need to show markets they are taking responsibility for its debt crisis and work out how to tally monetary union with budget policy, Spanish press reported U.S. President Barack Obama as saying.

U.S. Treasury Secretary Timothy Geithner makes a one-day trip to Poland this week for an unprecedented meeting with euro zone finance ministers as growing fears of a potential Greek debt default rip into Europe's banking sector.

German Chancellor Angela Merkel said on Tuesday that Europe was doing everything in its power to prevent Greece from defaulting on its debt and cautioned that an exit from the euro zone would unleash "domino effects" and should be avoided at all costs.

The Dow Jones industrial average .DJI finished up 68.99 points, or 0.63 percent, at 11,061.12. The Standard & Poor's 500 Index .SPX was up 8.04 points, or 0.70 percent, at 1,162.27. The Nasdaq Composite Index .IXIC ended 27.10 points higher, or 1.10 percent, at 2,495.09.

(Reporting by Atul Prakash; Editing by Hans-Juergen Peters)

Asked by RBB inforadio whether a Greek default would doom the euro, Merkel answered: "We are using all the tools we have to prevent this. We need to avoid all disorderly processes with regards to the euro."

Calling Europe's challenge "historic," she added that everything must be done to keep the euro zone intact "because we would see domino effects very quickly."

"In a currency union with 17 members, we can only have a stable euro if we prevent disorderly processes. Therefore it is our top priority to avoid an uncontrolled default, because it would hit not only Greece. The danger would be very high that it would hit many other countries."

Merkel's comments come a day after Economy Minister Philipp Roesler, who leads the junior coalition party the Free Democrats in her government, said that to stabilize the euro there could "no longer be any taboos."

Merkel said in her interview everyone should balance their words carefully to avoid further market volatility. She added that Germany felt "absolutely committed" to the euro, saying the country had benefited hugely from it.

Merkel said Europe would not be able to avoid changes to the Lisbon Treaty in the medium-term, making clear that the bloc's rule book needed to be changed to ensure countries that violated fiscal rules were punished.

"Until now, for example, if countries violate the Stability and Growth Pact they cannot be taken before the European Court of Justice," she said.

Merkel also expressed confidence that the German "stability" stance within the ECB would not change after the departure of executive board member Juergen Stark, who is to be replaced by deputy finance minister Joerg Asmussen, a Social Democrat (SPD) whose views on monetary policy are largely unknown.

She expressed confidence that her coalition parties would get a majority without having to rely on the opposition in a vote in the Bundetag lower house of parliament on September 29 to give the European Financial Stability Fund (EFSF) more powers.

(Writing by Noah Barkin; Reporting by Maria Sheahan and Annika Breidthardt; Editing by Anna Willard)

World stocks overall also staged a modest recovery but growing expectations of a Greek debt default, sharp drops in French bank shares on Monday due to their heavy sovereign debt exposure and renewed rises in Italian bond yields meant any rally was likely to be shortlived.

Investors tip-toed back into riskier assets after the Financial Times reported on its website on Monday that Italy had asked China to make "significant" purchases of its debt. But another media report said China may not agree to Italy's request, helping reverse initial gains for the euro.

Italy is due to auction up to 7 billion euros of bonds later in the day, including new five-year debt for which it is expected to offer a hefty premium to lure investors.

"All this cheer over an Italian bond buyer does risk looking somewhat exaggerated, especially with the threat of a Greek tragedy still looming, so sustaining the rally without any fresh data points will remain something of a challenge," Cameron Peacock, market analyst at IG Markets, said.

The pan-European share index .FTEU3 rose more than 1 percent, lifting the MSCI world equity index .MIWD00000PUS by 0.42 percent.

The euro briefly fell to a session low of 1.3595 against the dollar, giving up earlier gains with traders citing a report by Market News International which cast doubt on reports that China may step in to buy Italian debt.

The euro was last 0.3 percent lower at 1.3622.

"I'm bearish euro with the desperation that's out there manifesting itself with Italy allegedly seeking help from the Chinese," a London-based trader said.

The dollar .DXY also fell broadly and was last 0.4 percent down against a basket of major currencies.

The tentative recovery in equities cooled flight into the perceived safety of German bonds. Bund futures retreated off contract highs but growing worries that debt-choked Greece might default sooner than expected kept 10-year yields near record lows.

U.S. crude oil rose 0.5 percent as a weaker dollar rekindled some of the appeal of commodities.

(Reporting by Emelia Sithole-Matarise)

The trip comes as a surprise since Geithner returned only on Saturday from a meeting of Group of Seven finance ministers in Marseilles, France, where he said Europe's strongest economies must offer "unequivocal" backing to the weakest.

Geithner is expected to attend the euro zone meeting on Friday and then return to Washington. The Treasury said on Monday only that he will discuss efforts to boost global recovery and cooperate on financial regulation, but U.S. attention is focused on risks posed by potential European debt contagion.

The danger that a Greek debt default could roil bigger European economies was underlined on Monday as heavily exposed French banks' shares plunged and investor confidence in the euro zone's ability to surmount a sovereign debt crisis ebbed.

Underscoring concerns by the United States about the global economic dangers from Europe's debt troubles, the Treasury Department said Geithner would meet with International Monetary Fund chief Christine Lagarde on Tuesday.

Geithner's trip to Europe marks the first time a U.S. Treasury secretary will attend a meeting of euro zone finance ministers. But it is not the first time he has tried to push Europe into acting more decisively to cope with its debts.

In March, he made a quick one-day trip to Germany just days ahead of a Europe Union summit to meet his counterpart, Wolfgang Schaeuble, and to urge European countries to step up their efforts to handle the crisis.

He held a one-on-one session with Schaeuble again in Marseilles on Friday, but neither side would talk about what was discussed in that session.

On Monday, shares in Societe Generale, BNP Paribas and Credit Agricole slumped more than 10 percent amid expectations of an imminent downgrade by credit ratings agency Moody's due to their exposure to Greek bonds.

The surprise resignation of European Central Bank Chief Economist Juergen Stark on Friday and weekend comments by German politicians suggesting Athens may have to default and be "suspended" from the euro zone drove the euro to a 10-year low against the yen and a seven-month low against the dollar, though it later recovered some ground.

"Europe is not just lurching from one crisis to another. It is lurching into a new one before the previous one is solved," said Makoto Noji, senior strategist at SMBC Nikko Securities.

The storm on Monday forced SocGen, the hardest-hit French lender in recent weeks, to announce further drastic measures it denied only last week were under consideration, speeding up asset disposals and deepening cost cuts to free up 4 billion euros in fresh capital.

The bank's market value has shrunk from 110 billion euros in mid-2007 to just 12 billion on Monday. The bank's chief executive said there were no discussions regarding possible state intervention.

Finance Minister Francois Baroin said French banks were solid enough to withstand any crisis in Greece and Bank of France Governor Christian Noyer rushed out a statement saying French banks were not at risk.

"There is no crisis for the banks because those that are currently being hit on the markets have all the necessary means to offer solutions," Baroin told reporters, adding that G7 central banks were committed to providing "as much liquidity as banks need.

French banks and insurers are not only the biggest foreign holders of Greek government bonds, both directly and through Greek subsidiaries, but are also major creditors of Italy, which is increasingly in the markets' firing line.

Moody's is expected to downgrade Italy's Aa2 sovereign rating this week, Richard Kelly, head of European rates and FX research at TD Securities said, noting that both Fitch and Standard & Poor's already had lower ratings for Rome.

The Financial Times reported on its website on Monday that Italy has asked China to make "significant" purchases of Italian debt. The chairman of the China Investment Corp headed a delegation to Rome last week following a visit two weeks ago by Italian officials to Beijing to meet CIC and State Administration of Foreign Exchange officials, the report said.

OMINOUS START

It was an ominous start to a high-stakes week for the euro zone.

The ECB disclosed that it bought another 14 billion euros in euro zone government bonds last week, the biggest amount in three weeks, under a controversial policy to hold down troubled peripheral countries' borrowing costs.

The central bank holds a total of 143 billion euros in Italian, Spanish, Greek, Portuguese and Irish bonds under its securities market program, which drove Stark -- a traditional German central banking hawk -- to resign.

Greece resumed suspended talks with global lenders on a vital 8 billion euro aid installment after announcing a new real estate tax on Sunday to try to plug yet another gap in its 2011 budget deficit. Athens has only a few weeks' cash left.

EU finance ministers are scrambling to settle disputes over a second Greek bailout, including a spat over Finnish demands for collateral, in time for Friday's meeting in Poland.

The rescue package has been put in doubt by Greece's repeated missing of fiscal targets agreed with the EU and the International Monetary Fund, plus uncertainty over the scale of private sector participation in a bond swap and debt rollover.

Germany tried to douse the market impact of a string of weekend comments and media leaks suggesting Berlin is now assuming that Greece will default and working to seclude Athens from the rest of the euro zone.

Vice-Chancellor Philipp Roesler, who is economics minister and leader of Berlin's increasingly euroskeptic junior coalition party, the Free Democrats, said there could no longer be any taboos to stabilize the euro.

"That includes, if necessary, an orderly bankruptcy of Greece, if the required instruments are available," he wrote in an article in Die Welt newspaper.

However, an economics ministry spokesman said on Monday no such instruments were currently available, and a government spokesman insisted there was strong agreement between Roesler and Chancellor Angela Merkel on the euro zone debt crisis.

"We want to stabilize the whole euro zone with all member states," government spokesman Steffen Seibert said.

Asked about talk of a suspension, expulsion or voluntary departure of Greece from the euro zone, he said: "The legal position anyway stands in the way of such steps."

Seibert added that if Athens did not meet its fiscal commitments to the EU, ECB and IMF, that would automatically lead to nonpayment of the next tranche of aid.

Greece's deputy finance minister said the government had cash to operate until next month, highlighting the urgent need for the next emergency loan.

Greek power workers threatened to sabotage the new property tax announced by the government on Sunday as a last-ditch effort to please foreign creditors. Authorities plan to collect the tax through electricity bills to ensure swift payment.

(Additional reporting by Anirban Nag in London, Elena Berton and Jean-Baptiste Vey in Paris, Harry Papachristou in Athens and Brian Rohan in Berlin; Writing by Paul Taylor and Glenn Somerville; Editing by Dan Grebler)