FROM MORRISON SECURITIES PTY. LTD:

U.S. STOCK MARKETS

U.S. stocks erased gains from a day spent mostly in positive territory to close flat Tuesday, as worries resurfaced in late trading about potential European instability.

The Dow Jones Industrial Average fell 0.01%, or 1.6 points, to 12502.8. The Standard & Poor's 500-stock index gained 0.05%, or less than one point, to 1316.6, and the Nasdaq Composite dropped 8 points, or 0.3%, to 2839.

Stocks were on track to notch their first two-day winning streak this month before concerns resurfaced about a potential Greek exit from the Euro zone.

Former Greek Prime Minister Lucas Papademos told Dow Jones Newswires Tuesday that preparations for an exit are being considered and the scope to negotiate any loan program for the country would be very limited, sparking a late-day selloff.

European Union leaders are slated to meet Wednesday. U.S. stocks saw solid gains in early trading and European stocks closed at their highest point this month on hopes of progress at the summit.

Financial stocks were still the biggest gainers for the day, adding 0.7%. J.P. Morgan Chase headed the pack, gaining 4.6%. Even with Tuesday's increase, the stock has slumped more than 15% since it announced an unexpected $2 billion-plus trading loss earlier this month. Morgan Stanley, Citigroup Inc., Bank of America Corp. and Goldman Sachs Group Inc. all gained as well.

Facebook inc. (FB) shares fell almost 9% amid reports of underwriters cutting revenue estimates ahead of the social network's stock-market debut. In corporate news, Urban Outfitters Inc. jumped 7.42%, the biggest gains of any stock in the S&P 500 index, after the apparel retailer reported fiscal first-quarter earnings that exceeded expectations.

Express Inc. shares plunged more than 27% after the young-adult apparel retailer reported fiscal first-quarter earnings that fell shy of estimates and provided a downbeat second-quarter outlook.

EUROPEAN STOCK MARKETS

Gains for resources and banks boosted European stocks Tuesday as investors rushed to risky assets amid hopes China and the euro zone will take action to boost economic growth and combat signs of a global slowdown.

The Stoxx Europe 600 index closed 1.9% higher at 244.70. The Organization for Economic Cooperation and Development Tuesday cut its forecast for euro-zone growth and said it backed the idea of joint issuance of euro-zone bonds along with other measures to help the region.

A report in the Financial Times the previous day said European Union officials have approved an initial plan to issue commonly backed bonds to fund growth projects, a move that some say is a step toward issuing common euro-zone bonds for sovereign debt.

Italy's FTSE MIB index surged the most among country-specific indexes, up 3.4% to 13,456.03, as banks rallied. UniCredit SpA jumped 5.7% and Banca Monte dei Paschi di Siena SpA gained 5.6%.

London's FTSE 100 index rallied 1.9% to 5,403.28, helped by a 4.2% gain for Vodafone Group PLC. The mobile operator posted a 13% decrease in full-year net profit but revenue rose 1.2%, beating analysts expectations.

Resource stocks were also strong performers. Shares of BP PLC rose 1.6%, while Royal Dutch Shell PLC gained 2%. Among mining stocks, Rio Tinto PLC jumped 4% and BHP Billiton PLC added 2.3%. In France, the CAC 40 index rose 1.9% to 3,084.09. Renault SA jumped 6.3% and Peugeot SA gained 3.3%.

Banks were also higher, with Societe Generale SA up 4.7%, BNP Paribas SA up 3.1% and Credit Agricole SA up 4.7%. The German DAX 30 index rose 1.7% to 6,435.60, helped by a 3.2% increase for shares of Daimler AG, a 4.4% rally for Volkswagen AG and a 2.7% rise for BMW AG. Spain's IBEX 35 rose 2.1% to 6,661.30, with BBVA SA up 2.6%.

ASIA-PACIFIC STOCK MARKETS

Asian markets climbed ahead of Wednesday's European Union summit where leaders are expected to discuss measures to promote growth and ways to keep Greece in the euro zone.

Hong Kong's Hang Seng Index was up 0.6% at 19039.15, ending a losing streak that has driven the index down in 12 of the last 13 sessions.

The index was helped up by a recovery by its single largest constituent, HSBC, which ended the day 0.6% higher. Japan's Nikkei was up 1.1% at 8729.29.

The gains came prior to Fitch Ratings downgrading Japan's sovereign rating after the close to single-A-plus, with a negative outlook. The ratings were previously double-A for the long-term foreign currency rating and double-A-minus for the local currency issuer default rating. South Korea's Kospi gained 1.6% to 1828.69, and the China Shanghai SE Composite gained 1.1% to 2373.31.

In Hong Kong, Ports Design crashed 38.3% after resuming trading on an announcement saying that the designer and retailer company had discovered presentation errors and omissions in disclosures for statements in the 2010 financial year.

Sun Hung Kai Properties rose 2.1% after Credit Suisse said in a note that now's the time to get into the Hong Kong developer. In Japan, China-linked machinery stocks were up on Chinese Premier Wen Jiabao's weekend comments on the need to avoid a slowdown in the Chinese economy.

Construction equipment manufacturer Komatsu rose 5.3% and Hitachi Construction Machinery climbed 2.6%. Major real estate companies Mitsui Fudosan and Mitsubishi Estate climbed 3.7% and 1.4%, respectively, as the Bank of Japan's two-day policy meeting got underway. Japanese property companies have outperformed in recent sessions as investors hope for more stimulus by the central bank.

COMMODITIES

Base metals closed mixed on the LME Tuesday, boosted a tad late in the session by stronger-than-expected homes sales data from the U.S., but still trading cautiously ahead of a much-anticipated European Union summit.

At the close, LME three-month copper was 0.1% higher at $7,739 a metric ton. Thinly traded tin led the complex, closing 2.3% higher on the day at $19,700/ton. Oil prices slid to an eight-month low as concerns about Iran subsided somewhat.

Light, sweet crude for June delivery fell 91 cents to $91.66 a barrel in light trading, the lowest level since October 2011.

Traders and analysts said that a proposed deal between Iran and the International Atomic Energy Agency should ease tensions between the West and Iran's nuclear program. Iran had threatened to disrupt supplies if the European Union went ahead with sanctions over Tehran's projects.

Gold futures fell for the second-consecutive day, as the dollar's gains after a credit downgrade of Japan and continued strain in Europe's financial system limited demand for the metal as a currency hedge. The most actively traded contract, for June delivery, fell $12.10, or 0.8%, to settle at $1,576.60 a troy ounce on the Comex division of the New York Mercantile Exchange.