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Even so, the overall consumer confidence reading was low by historical standards, and in a reminder of some of the weaker spots in the economy, a separate report on Tuesday showed the housing market continues to struggle: home prices fell for an eighth straight month in February, inching closer to an April 2009 trough.

The Conference Board, an industry group, said its index of consumer attitudes rose to 65.4 in April from a revised 63.8 in March. The reading topped analysts' forecasts for 64.5. March was originally reported as 63.4.

The present situation index climbed to its highest since November 2008, rising to 39.6 from 37.5 the month before. The expectations index climbed to 82.6 from 81.3, and consumers' expectations for inflation in the coming 12 months fell to 6.3 percent from 6.7 percent.

Despite the fall in the proportion of those who said jobs were hard to get, to 41.8 percent from 44.4 percent the month before, the longer term view was mixed.

Those expecting more jobs in the next six months declined to 17.5 percent from 19.6 percent, while those anticipating fewer jobs in the months ahead also declined to 19 percent from 20.5 percent.

"Confidence improved in April, but consumers remain far from optimistic," Chris Low, chief economist with FTN Financial Group, wrote in a note.

Higher energy prices from the political unrest in the Middle East and North Africa have weighed on consumers lately and there has been debate over whether the price increases will be temporary.

"In our view, confidence is not likely to go up meaningfully until gas prices and unemployment come substantially down," Wells Fargo said in a note.

The U.S. economy faces new headwinds from soaring oil prices, U.S. Treasury Secretary Timothy Geithner said on Tuesday, but he said a forecast of 3 to 4 percent growth seemed reasonable.

HOUSING PRICES SCRAPE 2009 LOWS

The consumer data gave U.S. stocks a lift, as did solid earnings from bellwether companies.

Separate data on Tuesday showed the housing market continues to struggle as U.S. single-family home prices fell for an eighth straight month in February, inching closer to an April 2009 trough.

The S&P/Case-Shiller composite index of 20 metropolitan areas declined 0.2 percent in February from January on a seasonally adjusted basis, slightly better than economists' median forecast for a drop of 0.3 percent.

The 20-city composite index was at 139.27, holding just a hair above its 2009 low of 139.26. Average home prices across the United States are back to levels where they were in the summer of 2003, S&P said.

Prices in the 20 cities have fallen 3.3 percent year over year, in line with expectations.

"There is very little, if any, good news about housing. Prices continue to weaken, trends in sales and construction are disappointing," David Blitzer, chairman of the Index Committee at S&P Indices, said in a statement.

The glut of houses up for sale has kept prices low and the market has struggled to regain traction since a home buyer tax credit expired last spring.

Other data in the last week has suggested some stabilization in the market with sales of new and existing homes rising in March.

"House prices are still falling due to distressed sales. But the pace of price decline is slowing so things seem to be stabilizing," said Rudy Narvas, senior economist at Societe Generale in New York.

Focus was also on the Federal Reserve officials meeting Tuesday and Wednesday with the discussion likely to focus on the central bank's next move in its monetary stimulus policy.

The Fed looks certain to stick to its plan to complete its $600 billion bond-buying program in June and is unlikely to rush to tighten policy given an uncertain economic outlook.

(Additional reporting by Richard Leong; Editing by Padraic Cassidy)

Ford also said on Tuesday that last month's earthquake in Japan had "minimal" impact on its business.

Lewis Booth, Ford's chief financial officer, said that so far the automaker has lost about 12,000 to 14,000 vehicles of production in Asia, where it has shut several plants temporarily.

Ford beat expectations on Tuesday, which helped send the company's share up 3.5 percent to $16.09. Its fourth quarter 2010 results missed analyst expectations by a wide mark.

Any near-term production losses are likely to recover in late 2011 and into 2012. Production in Ford's business regions outside of Asia have not yet been changed.

Net income rose to $2.55 billion, or 61 cents a share, compared with $2.09 billion, or 50 cents a share, in the year earlier period. It was the highest first-quarter net income since 1998.

Excluding one-time items, it earned 62 cents a share, easily topping the 50 cents analysts polled by Thomson Reuters I/B/E/S had expected. It was the seventh straight quarter of operating profit.

Revenue rose to $33.1 billion from $28.1 billion last year. Analysts had expected $29.7 billion.

(Reporting by Bernie Woodall and Ben Klayman; Editing by Derek Caney)

The main focus is on the two-day meeting of the U.S. Federal Reserve's policymaking committee on Tuesday and Wednesday, with Fed Chairman Ben Bernanke holding a press conference after it ends.

Investors will look for signs about the central bank's stance on monetary policy when the Fed's bond buying program stops in June.

Earnings news is also to be in the spotlight, United Parcel Service (UPS.N), an economic bellwether, first-quarter operating profit is expected to rise to 83 cents per share from 53 cents a year ago, with revenue increasing to $12.72 billion from $11.73 billion, according to Thomson Reuters I/B/E/S.

Analysts expect Amazon.com Inc (AMZN.O) to report a first-quarter profit of 61 cents per share, down from 66 cents a year earlier, according to Thomson Reuters I/B/E/S.

Ford (F.N) is due to report first-quarter results. Toyota Motor Co (7203.T) may slip behind General Motors (GM.N) and Volkswagen (VOWG_p.DE) to No. 3 in the automaker production rankings due to continued worries in the wake of the March 11 Japan's earthquake and tsunami.

In extended trading on Monday, shares of Netflix Inc (NFLX.O), the top movie rental service, fell after the market close, when it issued an earnings outlook below expectations.

Also after the bell, pharmacy benefit manager Express Scripts Inc (ESRX.O) shares fell in extended trading after it reported a lower-than-expected quarterly profit.

Shale gas producers, Chesapeake Energy (CHK.N) said it had "completed efforts to achieve permanent well control" which last week suffered a blowout.

Investors are to eye the U.S. S&P/Case-Shiller Home Price Index for February at 1300 GMT and at 1400 GMT is the release of both the U.S. Consumer Confidence for April and the Richmond Fed Manufacturing, Services Indexes for April.

U.S. crude futures fell more than $1 on Tuesday ahead of the Fed meeting, while silver dropped as traders covered risks ahead of an options expiry.

European Central Bank Governor Jean-Claude Trichet was quoted as saying he shares the view that a strong dollar is in the interest of United States.

European shares gained 0.3 percent on Tuesday, with financial stocks among the top performers after UBS (UBS.N)(UBSN.VX) client inflows outstripped forecasts.

U.S. stocks fell on Monday in light volume after Kimberly-Clark (KMB.N) lowered its outlook raising investor concerns about higher commodity costs on company profits.

The Dow Jones industrial average .DJI dropped 0.2 percent, the Standard & Poor's 500 Index .SPX shed 0.2 percent, but the Nasdaq Composite Index .IXIC gained 0.20 percent.

(Reporting by Joanne Frearson; Editing by Erica Billingham)

Commodity prices .CRB too retreated after silver fell more than 1 percent when it failed to break key technical resistance levels and analysts said the sell-off spilled over into other commodities including oil.

Japan's Nikkei .N225 fell 1 percent while South Korea's KOSPI .KS11 was down 0.3 percent. Shares elsewhere in Asia .MIAPJ0000PUS also edged lower.

"There are more earnings coming up, and the market is also carefully awaiting the outcome of the Federal Reserve meeting this week," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

"If the Nikkei were to move in either direction, it would be after the FOMC meeting," Nishi said.

The greenback came under a bit of selling pressure versus the yen in early trade but losses were limited on expected dollar demand from Japanese asset management firms as a number of investment trusts or toushin are due to be launched on Tuesday.

Trade was volatile as investors were reluctant to wager big bets before the April 26-27 Federal Open Market Committee meeting.

U.S. crude futures fell more than $1 early on Tuesday, snapping three days of gains. Saudi Aramco chief executive Khalid al-Falih said on Tuesday key producer Saudi Arabia was not comfortable with current oil prices.

In U.S. markets, shares ended lower as the threat of rising commodity prices prompted companies such as Kimberly-Clark (KMB.N) cut the low end of its full-year outlook because of rising input costs.

U.S. Treasuries were firm on hopes the Fed will leave interest rates near zero for the rest of the year with the 10-year U.S. yield down more than 20 basis points from the month's highs at 3.36 percent.

(Additional reporting by Haruya Ida in TOKYO and Umesh Desai; Editing by Ramya Venugopal)

Shares in Minmetals, a unit of China's largest metals trader, were placed on a trading halt in Hong Kong with the company expected to respond to Barrick's rival bid later on Tuesday.

An unsuccessful capital raising by Minmetals in Hong Kong last week prompted speculation it might not have the funding in place to formally launch the C$6.3 billion offer it announced earlier this month.

State-owned Chinese firms also traditionally do not get drawn into bidding wars.

However, some analysts said they expected Minmetals to respond with a higher offer. One source close to the deal said Minmetals chief executive Andrew Michelmore was under pressure to secure a deal although noted the company was having funding issues.

"Michelmore is liable to lose, and I have to use a Chinese expression here, a hell of a lot of face if he doesn't get a deal away," said the source, who was not authorized to talk publicly about the deal.

Canada's Barrick, the world's largest gold miner, announced an agreed offer for Equinox on Monday, seeking to tap surging demand from China and other developing economies that has pushed prices up more than sevenfold in the past eight years.

Barrick Chief Executive Aaron Regent said it was too early to speculate on how it would respond to a bidding war with Minmetals but highlighted his company's strong balance sheet and access to debt.

"We put what we think is a fair offer on the table and the Equinox board and management think so as well and we have their endorsement. If there is another bid coming we will have to wait and see," Regent told reporters on a conference call.

UNIQUE OPPORTUNITY

Barrick offered to buy Equinox for C$8.15 a share, an 8.7 percent premium over its Thursday closing price. The all-cash bid is 16 percent higher than Minmetals' earlier offer.

Equinox shares jumped 11.6 percent in Toronto on Monday and closed at C$8.37, only about 2.6 percent higher than Barrick's offer, indicating investors were divided about a higher offer emerging.

"China has too much hot cash and the state policy is to encourage domestic companies to go out buying resources," said Zibo Chen, an analyst at Kingsway Financial Services Group. He would not speculate on whether Minmetals will raise its offer but said. "Even if they fail this time, the company will continue to seek opportunities overseas," he said.

Equinox, a global miner listed in Canada and Australia, owns the Lumwana mine in Africa's rich Zambian copper belt and most of the Jabal Sayid project in Saudi Arabia.

"This is a unique opportunity, an opportunity to acquire a large copper production base with expansion potential in an attractive region," Regent said.

Equinox had previously called the C$7-a-share Minmetals offer a low-ball bid. On Monday it said it believes the Barrick bid is superior in terms of price and its likelihood of completion.

In Australia, markets were closed for a public holiday. Trading resumes on Wednesday.

Minmetals said it would not comment on the Barrick offer until it had studied the details.

COPPER/GOLD FOCUS

Barrick would use about half of the $4 billion in cash they have on their balance sheet to fund the deal, Regent said. The balance would be funded with debt, revolving credit facilities and new bonds.

Regent, who has a background in base metals, sees the takeover bid as an opportunity to gain access to the Zambian copper belt at a time when copper prices are expected to keep climbing to fresh records. London copper hit an all-time high above $10,000 a tonne in February and traded near $9,700 on Tuesday.

Barrick will double its position in copper with the acquisition while reducing Barrick's exposure to gold to 80 percent from a current 90 percent.

Regent said the company's focus remained on copper and gold and that it was not planning on expanding into other commodities at this stage.

Equinox's Lumwana mine is Africa's third-largest copper operation by production and the Jabal Sayid development is due to start production next year.

(Additional reporting by Alison Leung in HONG KONG; Editing by Lincoln Feast)