Equities, dollar and oil gain as gold slips

Wall Street and European stocks rebound more than 1%

Wall Street and European stocks rebounded more than 1% on Monday in rallies that, along with robust gains in the dollar and global oil markets, showed investors were tilting toward riskier assets.

Gold, which benefits from investors' worries, fell back from a three-week high.

After another day of general weakness in Asian stock markets, US equities bounced back from big losses last week, when the Federal Reserve's decision to keep interest rates near zero fanned worries about the health of the global economy.

But US equity gains that had topped 1% earlier in the day were pared by a downturn in biotechs after US Democratic presidential candidate Hillary Clinton said she would announce a plan to stop "price gouging" for speciality drugs.

The Dow Jones industrial average unofficially ended up 125.61 points, or 0.77%, to 16,510.19, the S&P 500 gained 8.94 points, or 0.46%, to 1,966.97 and the Nasdaq Composite added 0.04% to 4,828.96.

The pan-European FTSEurofirst 300 closed up 1% even though Germany's DAX was stuck in neutral. Shares of car giant Volkswagen tumbled 19% after it was found to have cheated US emission tests.

Investors cheered an unexpectedly clear election victory for the Syriza party in Greece on Sunday that boosted hopes its bailout programme would stay on the road.

In Asia, equity markets slumped, with 1.5% to 2% falls in Australia, Korea and Malaysia. China defied the region's downtrend, with the Shanghai Composite index up 1.9% and the CSI300 rising 1.75%.

Oil rose, with US crude surging around 4% on signs of declining stockpiles and less drilling that could reduce future output.

"The economic environment has changed since the Fed last hiked rates (in 2006)," said Michael Hewson at CMC Markets in London. "It is not just the US central bank ... It is wearing the mantle of the global central bank, and markets are struggling with that."

The US dollar strengthened more than 1% against a basket of major currencies on hopes the Fed was still on track to hike rates this year while the European Central Bank may ease further.

The euro at 120.51 yen.

The Fed's decision last week may lead other central banks, including the ECB, to ease further, said Vassili Serebriakov, currency strategist at BNP Paribas in New York.

"The Fed's talking a little bit more hawkish; the ECB's talking a little more dovish," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.

US Treasuries prices fell as US equity markets rallied and three top Federal Reserve officials spurred sales of debt by suggesting that a year-end US interest rate increase was possible.

Gold retreated from a near three-week high as strength in stocks and the dollar dampened a rally. Spot gold