London's FTSE 100 opened 0.4% higher, Frankfurt's DAX index was up 0.8% at 5651and Paris's CAC-40 index opened 1.1% higher at 2926.13.
Sentiment recovered following comments from Standard & Poor's Ratings Services and Moody's Investors Service that the failure wouldn't automatically lead to an imminent downgrade, said Capital Spreads.
The special congressional committee's inability to cut a deal had sent equity markets into a tail spin on Monday, as traders feared that another credit downgrade of the world's largest nation would follow. The Dow Jones Industrial Average slumped by 2.1%, while the Standard & Poor's 500-stock index shed 1.9% and the Nasdaq Composite slid 1.9%.
Despite the higher open for Europe, any gains are likely to be short-lived and demand for assets correlated with risk is unlikely to return owing to renewed concerns over France's credit worthiness.
On Monday, Moody's said it may change its stable outlook on France's triple-A rating to negative in the coming months, and that German banks have sizable exposures to troubled euro-zone countries.
Crédit Agricole said that despite the recent changes to governments in financially stressed European countries, there appear to be no signs of an improvement in the euro-zone crisis.
"In Spain, the victory of Popular Party, which promises to implement austerity measures, in the general election, failed to calm the market, with the country's 10-year bond yield up to 6.56%," the bank said.
Investors will be looking to Spain's bond auction for three-month and six-month Treasury bills at 4:30 a.m. EST.
The market will also focus on a raft of economic data. In the U.K., public- sector-net-borrowing data are due at 4:30 a.m. EST, while in the euro zone, consumer confidence will be released at 10:00 a.m. Before that, the U.S. will publish the second release of third-quarter gross domestic product. Markets will also focus on the Federal Reserve's meeting minutes, due to be published at 2:00 a.m. EST.
In Asia, stock markets were lower, with Japan's Nikkei Stock Average down 0.4%, and Australia's S&P/ASX 200 0.7% lower. South Korea's Kospi Composite rose 0.3% in choppy trade after earlier dropping nearly 2%. China's Shanghai Composite Index slipped 0.2%, Hong Kong's Hang Seng Index lost 0.6%.
In currency markets, the euro recovered some ground after falling against the dollar. The dollar had been helped by haven buying following the failed debt-reduction negotiations in the U.S.
The euro was at $1.3507 against the dollar, from $1.3490 late Monday in New York, while the dollar was at ¥77.06, from ¥76.89.
In commodity markets, the price of spot gold was at $1,685.80 a troy ounce, up $3.60 from its New York settlement on Monday. January Nymex crude-oil futures were up 35 cents at $97.27 a barrel, while January Brent oil futures were up 39 cents at $107.27. For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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