| NEW YORK
NEW YORK Wall Street and European stocks rebounded more than 1 percent on Monday in rallies that, along with robust gains in the dollar and global oil markets, showed investors were tilting toward riskier assets.
Gold, which benefits from investors' worries, fell back from a three-week high.
After another day of general weakness in Asian stock markets, U.S. equities bounced back from big losses last week, when the Federal Reserve's decision to keep interest rates near zero fanned worries about the health of the global economy.
But U.S. equity gains that had topped 1 percent earlier in the day were pared by a downturn in biotechs after U.S. Democratic presidential candidate Hillary Clinton said she would announce a plan to stop "price gouging" for specialty drugs.
The Dow Jones industrial average .DJI unofficially ended up 125.61 points, or 0.77 percent, to 16,510.19, the S&P 500 .SPX gained 8.94 points, or 0.46 percent, to 1,966.97 and the Nasdaq Composite .IXIC added 0.04 percent to 4,828.96.
The pan-European FTSEurofirst 300 .FTEU3 closed up 1 percent even though Germany's DAX .GDAXI was stuck in neutral. Shares of car giant Volkswagen (VOWG_p.DE) tumbled 19 percent after it was found to have cheated U.S. emission tests.
Investors cheered an unexpectedly clear election victory for the Syriza party in Greece on Sunday that boosted hopes its bailout program would stay on the road.
In Asia, equity markets slumped, with 1.5 percent to 2 percent falls in Australia , Korea .KS11 and Malaysia .KLSE. China defied the region's downtrend, with the Shanghai Composite index .SSEC up 1.9 percent and the CSI300 .CSI300 rising 1.75 percent.
Oil LCOc1 rose, with U.S crude surging around 4 percent on signs of declining stockpiles and less drilling that could reduce future output.
"The economic environment has changed since the Fed last hiked rates (in 2006)," said Michael Hewson at CMC Markets in London. "It is not just the U.S. central bank ... It is wearing the mantle of the global central bank, and markets are struggling with that."
The U.S. dollar strengthened more than 1 percent against a basket of major currencies .DXY on hopes the Fed was still on track to hike rates this year while the European Central Bank may ease further.
The euro <EUR=EBS was last down 1 percent against the dollar at $1.1192. The greenback was up 0.45 percent against the Japanese yen JPY=EBS at 120.51 yen.
The Fed's decision last week may lead other central banks, including the ECB, to ease further, said Vassili Serebriakov, currency strategist at BNP Paribas in New York.
"The Fed's talking a little bit more hawkish; the ECB’s talking a little more dovish," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.
U.S. Treasuries prices fell as U.S. equity markets rallied and three top Federal Reserve officials spurred sales of debt by suggesting that a year-end U.S. interest rate increase was possible.
Gold retreated from a near three-week high as strength in stocks and the dollar dampened a rally. Spot gold XAU= was down 0.5 percent at $1,132.80 an ounce.
(Editing by Bernadette Baum and James Dalgleish)