European shares set to rise as investors await earnings

U.S. stocks rose overnight, spurred by optimism ahead of earnings from key tech firms International Business Machines and chip maker Texas Instruments which were released after the closing bell.

But both firms failed to impress as their topline revenue growth disappointed markets, highlighting concerns that the global economic recovery is losing steam.

Asian stocks gained on Tuesday, but the Nikkei average fell as much as 1.7 percent as traders returned from a long weekend and caught up with Monday's losses in the region.

European shares fell on Monday after gloomy U.S. housing data rekindled worries about the pace of economic recovery, more than offsetting positive mergers and acquisitions sentiment, led by International Power.