Stocks rose on today, boosted by strong US labour market data and bids on European banks, while the euro struggled versus the US dollar on concerns that the euro zone debt crisis will only continue to intensify.
Volatility was expected as trading volumes in major markets were thin.
Stocks climbed on Wall Street after the government reported that new claims for unemployment benefits dropped to their lowest in more than 3.5 years, and stronger business investment and a fall in inventories pointed to a pickup in output in the current quarter despite a lower reading in revised gross domestic product for the third quarter.
"Clearly the year has ramped nicely, based on an improving economic picture," said Phil Orlando, chief equity market strategist at Federated Investors in New York.
"The double-dip fear the bears were talking about in the second half of the year is off the table at this point and investors are seeing domestic fundamentals are in pretty good shape."
Banks were among the top performers in European and US equity markets. Traders said the European Central Bank tender of cheap loans to the sector would help ease the funding strains for banks.
The Stoxx Europe 600 Banks index rose 1.5 per cent and the S&P financial sector added 0.8 per cent.
Global stocks as measured by MSCI rose 0.4 percent, still on track for a fall of more than 10 per cent in 2011.
Analysts said the European Central Bank's first tender of ultra-cheap three-year loans yesterday was not giving much support to the euro. Doubts remained over how much of the funds will be lent to boost the ailing euro zone economy or used to buy peripheral sovereign bonds as banks deleverage and cut back exposure to government debt.
The looming threat of euro zone sovereign credit rating downgrades was also keeping investors on edge through the year-end season and into 2012.
Reuters
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