By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets headed for the
strongest weekly gain since April on Friday, after U.S. growth data
provided further evidence of the country's recovery and German
confidence figures pointed to a strong start to the new year.
The Stoxx Europe 600 index rose 0.5% to 321, on track for a 3.6%
weekly gain.
On Thursday, the benchmark saw its strongest rally since early
September after the Fed decided late Wednesday to slow its monthly
asset purchases, showing confidence in the underlying strength of
the U.S. economy. The decision came after European markets had
closed. The gains over the past days haven't, however, been enough
to lift the index out of losses for December, but investors have
still not given up on the idea of a "Santa Rally."
"We think that the rally will continue, now that we have one of
the biggest uncertainties removed out of the equation, and the
markets will keep grinding up in a thin volume due to the start of
the holiday season," said Naeem Aslam, chief market analyst at Ava
Trade in emailed comments.
"There is no sign of Santa leaving the town," he added.
U.S. stocks also traded higher on Friday, buoyed by data showing
the economy grew faster than expected in the third quarter.
In Europe on Friday, consumer-confidence data from both the U.K.
and Germany were in focus. In Germany, GfK Group's forward-looking
consumer-sentiment indicator rose to 7.6 points in January from 7.4
points in December, to hit its highest level since August 2007.
The picture was less bright in the U.K., however, where the
December reading fell to -13 from -12, marking a third-straight
month of declines in consumer mood. The data follow retail figures
released on Thursday, which showed shoppers spent less that
expected in November.
On a more upbeat note in the U.K., the Office for National
Statistics said the economy grew more than previously thought over
the past year and revised up the year-on-year growth in gross
domestic product to 1.9% from an earlier estimate of 1.5%, largely
due to higher consumer spending. Quarter-on-quarter, the ONS
confirmed growth of 0.8%.
Meanwhile, Standard & Poor's cut its long-term credit rating
on the European Union to AA+ from AAA, citing concerns about
contentious budget talks.
Among notable movers in Europe on Friday, SKF AB slid 6.2% after
the Swedish ball-bearing maker said it will take a provision of 3
billion ($456 million) Swedish kronor related to a European
Commission competition probe.
Shares of Vestas Wind Systems AS (VWDRY) climbed 0.7% after the
wind-turbine maker received a 220 MW order in the U.S.
Shares of BAE Systems PLC (BAESY) slid 4.6% in London after the
government of the United Arab Emirates on Thursday ended
discussions to buy fighter jets from a consortium led by the
British aerospace and defense firm.
Carnival PLC (CCL) gained 3.3% after Credit Suisse lifted the
cruise-line operator to outperform from neutral.
For the country-specific indexes, Germany's DAX 30 index rose
0.7% to 9,396.57, on track for the highest closing level in almost
three weeks.
France's CAC 40 index rose 0.3% to 4,191.64 and the U.K.'s FTSE
100 index added 0.4% to 6,614.21.
More must-reads from MarketWatch:
U.S. third-quarter revised up again, now 4.1%
Arora: The real reason Apple is falling
Weidner sees plenty of faults in Jamie Dimon's Christmas
card
Subscribe to WSJ: http://online.wsj.com?mod=djnwires