US stocks traded higher in the morning and oil prices initially fell more than 3 percent as news of Bin Laden's killing by US forces encouraged investors to take on risk.
But the focus gradually shifted back to the state of the global economy as it became clear that Bin Laden's death would not lessen geopolitical risks related to the unrest in the Middle East and North Africa.
"If anything, Bin Laden's death is more symbolic," said Keith Wirtz, chief investment officer at Fifth Third Asset Management, with $17.5 billion in assets. "I personally cannot draw a linkage between this macro event and the fundamentals of the capital markets."
Key US stock indexes were mixed after rising about 0.5 percent earlier in the session.
The Dow Jones Industrial Average was up 4.96 points, or 0.04 percent, at 12,815.50. The Standard & Poor's 500 Index was down 0.79 point, or 0.06 percent, at 1,362.82. The Nasdaq Composite Index was down 6.68 points, or 0.23 percent, at 2,866.86.
In Europe, the FTSEurofirst 300 index of top shares closed up 0.02 percent. The MSCI All-Country World Index gained 0.14 percent.
"We have geopolitical issues and we have economic issues," said Jason Brady, a managing director for Thornburg Investment Management in Santa Fe, New Mexico, with about $73 billion under management. "This is marginally better but I am not changing my outlook at all."
The dollar slipped because the impact of Bin Laden's death was ultimately negligible for the currency, said Shaun Osborne, senior strategist at TD Securities.
The US Dollar Index, which measures the greenback against a basket of major currencies, was down 0.13 percent.
"In the end it's monetary policy expectations which are the driving force for dollar weakness," said Marcus Hettinger, currency strategist at Credit Suisse in Zurich.
The euro hit a 17-month high above $1.48 on Monday as surprisingly strong manufacturing data in the euro zone bolstered the chances interest rates there could rise again to fend off inflation.
Against the dollar, the euro was up 0.53 percent at $1.4877.
The killing of Bin Laden cut prices for oil and gold on Monday but analysts warned it was far from the end of the political risk factor that has boosted the cost of the world's raw materials and energy.
Oil prices fell more than 3 percent, some $4 a barrel, and gold dropped from record highs. The dollar-dominated commodities were also pushed lower by the greenback's bounce from three-year lows on the news.
"The fall in price should be short-lived," said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt. "Talk that the risk premium should ease due to Bin Laden's death is premature. The risk premium is high because of the war in Libya and ongoing unrest in the Middle East and that is unlikely to change," he added.
Brent crude futures for June fell $4.22 to a low of $121.67 a barrel before climbing back to $124.42 by 1215 GMT. Last month Brent hit a 32-month high above $127.
US crude was $1.42 down at $112.51 a barrel.
Spot gold fell to nearly $1,540 an ounce after earlier hitting a fresh record high at $1,575.79.
By 1219 GMT it had partially recovered to $1,552.35 an ounce against $1,563.65 late in New York on Friday.
Silver tumbled 10 percent, its steepest fall since late 2008, hit by the dollar, increased margins for futures trading and a technical overhang after a 170 percent rally over the last 12 months to a record high last week.
Silver was bid at $45.00 an ounce at 1219 GMT, having earlier fallen as low as $43.04.
