European stocks finished higher Monday, with German equities recovering following the collapse of talks to form a coalition government for the eurozone's largest economy.

The U.S. stock market closed higher Monday, with the Dow leading the gains as investors continued to focus on corporate earnings and prospects for tax cuts.

Asian stocks edged higher on Tuesday as investors took heart from further evidence of strength in the global economy, while the dollar hovered near a one-week high against its peers thanks to higher U.S. yields and a floundering euro.