US retail sales give world stocks another lift

LONDON AP) - European and U.S. stock markets rose Friday after better than expected figures on both sides of the Atlantic helped ease concerns about the pace of economic recovery.

In Europe, the FTSE 100 index of leading British shares was up 23.10 points, or 0.4 percent, at 5,640.36 while Germany's DAX rose by 39.99 points, or 0.7 percent, to 5,968.62. The CAC-40 in France was 7.32 points, or 0.2 percent, higher at 3,936.27.

On Wall Street, the Dow Jones industrial average was up 24.49 points, or 0.2 percent, at 10,636.33 soon after the open while the broader Standard & Poor's 500 index rose 2.38 points, or 0.2 percent, to 1,152.62.

Sentiment was buoyed in the run-up to the U.S. open by the news that U.S. retail sales rose a monthly 0.3 percent in February. The increase was unexpected - the consensus in the markets was a decrease of around 0.2 percent partly because of the heavy snowfall witnessed on the East Coast during the month.

However, downward revisions to previous month's figures helped mitigate the market impact.

The figures are particularly important because they shine a light on the state of consumption in the U.S., a key driver of growth. The U.S. retail spending accounts for around 70 percent of the world's largest economy.

Earlier, European stocks and the euro had been buoyed by the news that industrial production in the eurozone soared by a record 1.7 percent in January from the previous month and that December was now showing a 0.6 percent increase instead of a 1.7 percent fall. As a result, the annual rate turned positive for the first time since April 2008.

"A much stronger than expected report injected enthusiasm into the euro and European stock markets," said Jane Foley, research director at Forex.com.

By mid afternoon London time, the euro was 0.5 percent higher at $1.3746.

On Thursday, the S&P 500 advanced 0.4 percent, to 1,150.24, above its Jan. 19 close of 1,150.23 - many analysts think the index's break above the 1,150 mark could augur further gains. The S&P now stands at its highest level since Oct. 1, 2008.

David Jones, chief market strategist at IG Index, thinks that next week's trading could well depend on whether the Dow Jones industrial average sustains its break above 10,600.

"This had proved quite a barrier to progress over recent days and a finish above here today could position global stock markets for more growth next week," said Jones.

Earlier, there was no clear direction in Asia, though Japan's Nikkei 225 stock average advanced 86.31 points, or 0.8 percent, to close at a seven-week high of 10,751.26.

The lackluster performance elsewhere was largely due to concerns that China may start raising interest rates and take other cooling measures to keep a lid on mounting inflationary pressures. The source of concern was a government report showing inflation in the fast-growing economy jumped to 2.7 percent last month.

Chinese shares led the declines in Asia, with Shanghai's index falling 1.2 percent. Investors there sold property shares on concerns higher-than-expected inflation might lead the government to hike in interest rates.

"Overheated industries, such as the real estate sector and some heavy industries, will be cooled as the government adjusts its macroeconomic policies, so those shares dropped heavily today," said Peng Yunliang, an analyst at Shanghai Securities in Shanghai.

Hong Kong's Hang Seng fell 0.1 percent at 21,209.74 and South Korea's benchmark gained 0.4 percent at 1,656.74.

Oil prices pushed higher as investors mulled whether extending a monthlong rally is justified amid evidence of weak U.S. crude demand. Benchmark crude for April delivery added 64 cents to $82.75.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.