LONDON – World stock markets mostly rose Thursday after another batch of positive earnings and further evidence that Europe's economy is recovering faster than previously expected.
The euro broke out of its recent tight trading range to breach the $1.31 mark for the first time since early May.
In Europe, the FTSE 100 index of leading British shares was up 36.83 points, or 0.7 percent, at 5,356.51 while Germany's DAX rose 42.19 points, or 0.7 percent, to 6,221.13. The CAC-40 was 23.28 points, or 0.6 percent, higher at 3,693.64.
Wall Street recovered the previous day's losses at the open after forecast-busting earnings from ExxonMobil Corp. and Avon Products Inc. The Dow Jones industrial average was up 71.83 points, or 0.7 percent, at 10,569.71 while the broader Standard & Poor's 500 index rose 7.79 points, or 0.7 percent, to 1,113.92.
On Wednesday, stocks in the U.S. slipped after the Federal Reserve said in its monthly assessment of the U.S. economy that the recovery has lost some of momentum.
A drop in initial jobless claims provided some relief on Thursday — though the Labor Department said claims fell modestly, they were slightly better than forecasts and any decline is uplifting because unemployment remains high.
However, analysts said nagging doubts about the U.S. economy will likely weigh on markets in the run-up to Friday's first estimate of second-quarter growth. The consensus in the markets is that the U.S. grew by an annualized rate of around 2.5 percent in the second quarter — that's still relatively healthy but is not strong enough to promote sustained jobs creation.
"U.S. data is patchy at best and this will likely ensure that optimism is kept in check," said Jane Foley, research director at Forex.com.
In Europe, stocks have managed to clamber higher Thursday after an exceptionally busy morning of earnings releases.
Pharmaceuticals companies AstraZeneca PLC, drugs and materials company Bayer AG and telecommunications companies BT PLC and France Telecom SA particularly impressed analysts.
"While the jury is still out on how much upside there is left from current levels, today's positive earnings...have helped inject a little enthusiasm back into trading," said Anthony Grech, head of research at IG Index.
Continuing evidence of a step-up in the pace of economic growth in Europe also helped stocks rally.
Germany, Europe's largest economy, is seemingly doing particularly well — figures Thursday showed the number of unemployed fell on a seasonally adjusted basis for the 13th month running.
Figures from the European Commission also showed that economic conditions across the eurozone improved further. Its economic sentiment indicator (ESI) rose to 101.3 points in July from 99 in June. Most analysts were not expecting much of a change.
The combination of solid earnings and economic news helped the euro rise up $1.3106, its highest level since May 4 — by mid afternoon London time, the euro was up 0.8 percent at $1.3090.
However, the main catalyst behind the latest euro advance was Wednesday's fairly pessimistic economic assessment from Fed, which came after the Commerce Department reported that orders for big-ticket items, known as durable goods, unexpectedly fell in June for the second month running.
The generally weak economic newsflow out of the United States over the past few weeks has caused concerns that the world's largest economy is not recovering from recession as easily as imagined and that the Fed will not be raising interest rates anytime soon.
That's important for the currency because rising interest rate expectations were one of the reasons why the dollar enjoyed a return to favor in the first few months of the year.
Earlier in Asia, Japan's Nikkei 225 stock average fell 0.6 percent to 9,696.02 as investors locked in profits following a 2.7 percent jump the previous day.
South Korea's Kospi eased 0.2 percent to 1,770.88 while Hong Kong's Hang Seng index was steady at 21,093.82. Australia's S&P/ASX 200 dropped 0.1 percent to 4,524.1 on weakness in banks.
Benchmarks in China, Taiwan, Indonesia and Singapore rose.
Benchmark crude for September delivery was down 5 cents at $76.94 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 51 cents to settle at $76.99 on Thursday.
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Associated Press Writer Alex Kennedy in Singapore contributed to this report.
