US stocks opened a tad higher following last week's sharp gains that pushed the benchmark S&P 500 to its highest close since May 3, while European shares rallied.

Inflows into safe-haven German government bonds slowed, keeping prices close to three-week lows after ECB President Mario Draghi said the central bank would do whatever it takes to preserve the euro, a message echoed by the leaders of Germany and France.

The rhetoric raised expectations that the ECB could take bold measures to lower Italian and Spanish borrowing costs that would also support riskier assets. Italy's benchmark 10-year borrowing costs eased below 6 percent.

"Certainly everyone thinks that Europe is going to come out with this big bazooka, and they also think the Fed will launch, so therefore the market is going to stay up here," said Ken Polcari, managing director, ICAP Equities in New York.

However, other investors doubt ECB policymakers will deliver in line with market expectations when they meet on Thursday, and this kept the euro lower and checked gains in commodities. The US central bank also holds a policy meeting on Tuesday and Wednesday. Speculation is growing that the Fed will do more to bolster the recovery after data showed US second-quarter gross domestic product expanded at a 1.5 percent annual rate, the weakest pace of growth since the third quarter of 2011.

The MSCI world equity index was up 0.4 percent, extending gains for a third straight day and reaching levels last seen in early July. The FTSEurofirst 300 index of top European shares was up 1.2 percent, hitting four-month highs.

On Wall Street, the Dow Jones industrial average was up 21.42 points, or 0.16 percent, at 13,097.08. The Standard & Poor's 500 Index was up 2.10 points, or 0.15 percent, at 1,388.07. The Nasdaq Composite Index was up 9.53 points, or 0.32 percent, at 2,967.62.

Germany's Bundesbank is opposed to a resumption of the ECB's secondary market bond buying as well as granting the euro zone rescue funds a banking licence, which would give them more firepower to tackle the debt crisis.

EURO LOWER

The euro was down 0.5 percent at $1.2259, retreating from a three-week high of $1.2390 hit on Friday, as investors became wary that hoped-for action from the ECB may fall short of expectations.

Brent crude fell to $105.97 a barrel, while spot gold was down 0.3 percent at $1,618.09 an ounce.

In the US bond market, the benchmark 10-year US Treasury note was up 2/32, with the yield at 1.536 percent.