By Chuck Mikolajczak
NEW YORK (Reuters) - World stock markets inched higher on Tuesday, lifted by gains in Europe amid sturdy corporate earnings and signs of economic strength, while U.S. stock indexes were little changed ahead of a policy meeting of the U.S. Federal Reserve.
IHS Markit's Manufacturing Purchasing Managers' Index for the euro zone jumped to 56.7 in April from March's 56.2, its highest level since April 2011, as demand remained strong despite rising prices.
BP shares rose 2.1 percent after the oil major's first-quarter profit tripled.
Shares of Apple were up 0.9 percent in morning trading ahead of its results after the closing bell on Tuesday. Gains in Mastercard, which was up 2.2 percent, were offset by a 1.8 percent decline in Pfizer after both companies posted earnings.
Robust results have helped lift share prices across the globe this year, with major U.S. indexes at or near record levels. First-quarter profits of companies on the benchmark S&P 500 index are expected to have risen 13.6 percent, the strongest rise since 2011, according to Thomson Reuters data. Those of their European counterparts are seen up 13.9 percent.
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"Investors are looking at Europe as a cheaper place to put money with greater upside because the U.S. is trading at near record highs," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.
"One of the primary themes we are going to see probably more of this year is rotation out of U.S. equities, given the very murky prospects for any significant move higher in prices and into a much more value-oriented landscape in Europe," Kenny said.
The Dow Jones Industrial Average rose 3.93 points, or 0.02 percent, to 20,917.39, the S&P 500 lost 0.71 points, or 0.03 percent, to 2,387.62 and the Nasdaq Composite dropped 0.74 points, or 0.01 percent, to 6,090.86.
The pan-European FTSEurofirst 300 index rose 0.54 percent and MSCI's gauge of stocks across the globe gained 0.17 percent.
The U.S. dollar hit a six-week high against the Japanese yen as traders discounted recent weak U.S. economic data and anticipated that the Federal Reserve would prepare markets for an interest rate increase in June in its statement following a policy meeting this week.
The yen weakened 0.24 percent versus the greenback to 112.12 per dollar.
The Fed is expected to hold interest rates steady after its two-day meeting beginning Tuesday, as it pauses to examine more economic data, but may hint it is on track for an increase in June.
Traders do not anticipate a hike on Wednesday but are currently forecasting a 65.2 percent chance of a 25 basis point hike at the Fed's June meeting, according to Thomson Reuters data.
Benchmark 10-year notes last rose 5/32 in price to yield 2.3108 percent, from 2.327 percent late on Monday, ahead of the statement from the central bank on Wednesday.
Oil prices steadied as lower production by Russia and major OPEC exporters balanced news of higher output in the United States, Canada and Libya.
U.S. crude fell 0.55 percent to $48.57 per barrel and Brent was last at $51.31, down 0.41 percent on the day.
Gold touched a three-week low of $1.257.37 an ounce as demand for the safe-haven asset waned. Spot gold dropped 0.1 percent to $1,254.76 an ounce. U.S. gold futures percent to $1,255.50 an ounce.
(Editing by Bernadette Baum)