By Nick Brown
(Reuters) - U.S. and European stocks edged up on Monday as investors shook off the weekend's chaotic G7 summit ahead of a week packed with diplomatic events, while a pair of U.S. Treasury Department auctions met with strong demand.
Bullishness on the part of investors that the historic summit scheduled for Tuesday between U.S. President Donald Trump and North Korean leader Kim Jong Un will go well helped the S&P 500 rise, along with gains in utility Sempra Energy.
"No one expects anything concrete to come of the meeting ... but if the tone is positive afterwards, it won't be a headwind for stocks," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.
The Dow Jones Industrial Average <.DJI> rose 47.52 points, or 0.19 percent, to 25,364.05, the S&P 500 <.SPX> gained 7.9 points, or 0.28 percent, to 2,786.93 and the Nasdaq Composite <.IXIC> added 21.14 points, or 0.28 percent, to 7,666.65.
U.S. Treasury yields climbed as the Treasury Department sold $54 billion in new coupon-bearing supply, and on the expectation that the Federal Reserve will raise interest rates on Wednesday.
Demand for the Treasury Department's $32 billion sale of three-year notes and $22 billion sale of 10-year notes was strong.
Three-year notes sold at a high yield of 2.664 percent, just below where they traded before the auction. Indirect bidders, which include fund managers, some central banks and other investors, took their largest share of the auction since January.
Benchmark 10-year notes
The 30-year bond
INVESTORS AWAIT MEETINGS
Markets seemed willing to abide a rowdy G7 summit over the weekend in anticipation of a slew of diplomatic and policy events this week.
Trump upset the Group of Seven's efforts to show a united front, choosing to back out of a previous joint communique. The action drew criticism from Germany and France, and Trump called Canadian Prime Minister Justin Trudeau "very dishonest and weak."
The Canadian dollar fell about 0.4 percent on the news to C$1.2977, while the Mexican peso shed 1.17 percent to 20.531 pesos per U.S. Dollar.
Instead, they are looking ahead to a busy week. Tuesday's North Korea summit will be followed by meetings of the U.S. Federal Reserve, which is expected to raise rates, and the European Central Bank - as well as a Brexit bill vote in the British parliament.
Also helping calm markets were comments from Italy's new coalition government that it had no intention of leaving the euro zone and planned to cut debt.
The statements pushed Italian stocks <.FTMIB> up more than 3.4 percent, while the pan-European FTSEurofirst 300 index <.FTEU3> rose 0.72 percent.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.35 percent.
The prospect of Italy remaining in the euro zone also sent Italian borrowing costs down sharply, as the euro
The dollar index, which measures the greenback against a basket of other currencies, <.DXY> rose 0.03 percent
In commodities, oil prices fell in early activity, pulled down by rising Russian production, before regaining momentum later.
(Reporting by Nick Brown; additional reporting by Sruthi Shankar, Karen Brettell and Tom Finn; Editing by Nick Zieminski and Steve Orlofsky)