The FTSE 100 index of leading British shares was up 22.30 points, or 0.4 percent, at 5,767.19 while Germany's DAX fell 3.84 points, or 0.1 percent, to 6,231.72. The CAC-40 in France was 4.10 points, or 0.1 percent, higher at 4,038.33.
Wall Street gave up some of Monday's gains at the open _ the Dow Jones industrial average was down 29.70 points, or 0.3 percent, at 10,943.85 soon after the open while the broader Standard and amp; Poor's 500 index fell 2.66 points, or 0.2 percent, to 1,184.78.
Optimism in the markets following Friday's U.S. jobs data for March was reined in by a sharp increase in Greek borrowing costs and a consequent slide in the euro. For European investors, Tuesday marked the first day they could respond to the U.S. jobs data after the four-day Easter holiday weekend.
Hopes that the Greek debt crisis may have been solved _ or at least diminished _ by an aid package less than two weeks ago appear to have been dashed amid conflicting reports out of the Greek capital.
Though a Greek finance ministry official denied reports that Athens was seeking to revise a deal hammered out last month which would provide Greece with bilateral loans from eurozone countries and the International Monetary Fund to avoid default, investors took fright. They sent the spread between Greek 10-year bonds and equivalent German issues up to 406 basis points Tuesday afternoon from about 360 points earlier in the day.
«Today's surge in Greek government bond yields underlines yet again the continued precariousness of the troubled economy's position,» said Jonathan Loynes, chief European economist at Capital Economics.
«With something close to ¤20 billion of debt needing to be refinanced by the end of May, the latest rise in yields is a major blow to hopes that Greece might yet manage to muddle through on its own. Needless to say, none of this is good news for the euro either,» Loynes added.
The euro was back in the doldrums, trading 0.9 percent lower at $1.3369.
All these worries about Greece have dampened the hopes generated by last Friday's figures showing that the U.S.
economy added 162,000 jobs in March, the most since the recession began.
The figures reinforced hopes about the state of the world's largest economy and propelled the Dow Jones industrial average in the U.S. to a fresh 52 week high during Monday's session. U.S. stock markets were also closed Friday.
The big event later in the U.S. is likely to be the release of the minutes to the last rate-setting meeting of the U.S. Federal Reserve. Investors will be interested to see whether the Fed sounds a more optimistic tone about the U.S. economy and whether there are signs that interest rates will start going up sooner than anticipated.
Particularly interesting will be if anyone joins Kansas City Fed President Thomas Hoenig in voting against the phrase keeping interest rates low «for an extended period.» «Barring any nasty surprises here global stock markets remain very healthy within their longer term recoveries and it does not look like it would take much to lift the Dow through 11,000 in the next couple of days,» said David Jones, chief market strategist at IG Index.
Central banks will be at the forefront of attention this week, with both the European Central Bank and the Bank of England set to leave their benchmark rates at 1 percent and 0.5 percent respectively. More interest will be on what the banks say about the recovery from recession.
Earlier, the Reserve Bank of Australia surprised many in the markets by increasing its benchmark rate by a quarter percentage point to 4.25 percent and hinted that further increases are in the offing to rein in inflationary pressures.
The interest rate hike helped Australia's benchmark S and amp;P/ASX 200 jump 0.9 percent to 4,953.70 and the Australian dollar to advance 0.3 percent higher to $0.9242.
Elsewhere, the pound was down 0.8 percent at $1.5165 as Prime Minister Gordon Brown confirmed that the general election will take place on May 6.
Though his governing Labour Party is behind in all opinion polls, some are showing that the gap between the Conservatives and Labour is narrow and that a so-called hung parliament, where no one party can command a majority in the House of Commons, remains a distinct possibility.
The worry in the markets is that economic policy in a post-election coalition would not be as clear-cut than if a single party emerged triumphant. The worry is amplified if a coalition cannot be concluded and a second election looms.
Earlier in Asia, Japan's benchmark Nikkei 225 stock average fell 0.5 percent, while Indonesia's main index dropped 0.2 percent. China, South Korea and India were little changed.
Markets in Hong Kong and Thailand were closed for holidays.
Benchmark crude for May delivery was up 23 cents to $86.85 a barrel.
