Inflation continued to be fairly benign. The U.S. consumer price index jumped 0.6% in September, mainly because of higher gasoline prices. Excluding food and energy, CPI climbed 0.1%, the same as August.

The FTSE 100 in London closed up 1.1%, while the DAX in Germany gained 1.6%. Japan's Nikkei average rose 1.4% overnight to close at 8,701. Hong Kong's Hang Seng rose 0.28%.

A senior official within the Spanish ministry of economy told the Financial Times the country would consider a request for a credit line in order to fulfill conditions of the European Central Bank to start a fresh round of bond purchases.

September consumer prices rose 0.4% in the United Kingdom, while raw material and fuel costs fell 0.2% in September against a 1.9% rise in August.

Gold for December delivery bounced back after Monday's steep decline, rising $8.70 to settle at $1,746.30 an ounce, while November light sweet crude oil rose 24 cents to close at $92.09 a barrel.

The benchmark 10-year Treasury dove 18/32, lifting the yield to 1.723%. The greenback lost 0.74%, according to the U.S. dollar index .

In other corporate news, Citigroup ( C) CEO Vikram Pandit abruptly resigned from both his post and the board. Michael Corbat was named to succeed him in the CEO post. Pandit had held the position since December 2007.

Pandit's departure, coming a day after the company's third-quarter report, was a surprise, and the stock added 1.6%.

Shares of Mattel ( MAT) rose 5% after the toy maker reported a profit of $365.9 million, or $1.04 a share, ahead of the consensus view for earnings of 99 cents a share.

PNC Financial Services Group ( PNC) reported a third-quarter profit of $924 million, or $1.64 a share, while revenue rose 15%. The stock fell 4%.

--Written by Joe Deaux in New York.

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