A rebound on Wall Street helped Europe's main stock markets close higher Thursday despite big selling in Asia earlier and ongoing unease about the scale and speed of any global economic recovery.
In Europe, Germany's DAX closed up 10.86 points, or 0.2 percent, at 4,738.47 while France's CAC-40 rose 3.39 points, or 0.1 percent, to 3,156.29. The FTSE 100 index of leading British shares was the best-performing major European index, ending 31.21 points, or 0.7 percent, higher at 4,362.58.
All three markets had been solidly lower amid expectations that Wall Street would open lower and earlier hefty losses in Asia following Wednesday's disappointing U.S. retail sales data.
But Wall Street opened higher amid bargain-hunting, and extended gains after Wal-Mart Stores Inc., the world's biggest retailer, reported first-quarter results in line with analysts' expectations.
The Dow Jones industrial average was up 41.17 points, or 0.5 percent, at 8,326.06 while the broader Standard & Poor's 500 index rose 7.48 points, or 0.9 percent, to 891.40.
The gains in the U.S. came despite news from the Labor Department that weekly jobless claims rose by more than anticipated. New claims jumped to 637,000, ahead of the 610,000 anticipated in the markets.
Stocks around the world have fallen for much of the week amid nagging doubts that the recent two-month may have been overdone.
Those concerns increased Wednesday following the news that U.S. retail sales fell 0.4 percent last month, worse than the flat reading expected. The April weakness followed a 1.3 percent drop in March that was worse than first estimate.
A rebound in consumer demand is considered a necessary ingredient for ending the
recession both domestically and abroad as the U.S. consumer accounts for around 70 percent of the U.S. economy and around 20 percent of the global economy.
Stocks around the world have rallied strongly over the last few weeks — with some major indexes turning positive for the year before this week's selling. The S&P has risen around 30 percent its lows.
The trigger for the gains has been better than expected economic news, particularly in the U.S., the world's largest economy but those hopes were dampened if not totally extinguished by the retail sales data.
"The 'green shoots' brigade seem to lack the courage of their convictions," said Stephen Lewis, an analyst at Monument Securities.
"For U.S. stock indices to have dropped yesterday by 2 percent or more, after one piece of weaker than expected economic data, was a pusillanimous response," he added.
The main talking point in the markets through this week has been whether the two-month rally was just a
bear market rally or whether it is a harbinger of a fundamental improvement.
"Further large gains from here would require a V-shaped economic recovery," said Julian Jessop, an analyst at Capital Economics, who reckons that the gains witnessed over the last couple of months have been justified in terms of the general improvements in business surveys and the stabilization in consumer confidence.
"That scenario is not completely unrealistic in some countries, notably the U.S. but it still seems much more likely that the recovery will falter as the temporary factors that have contributed to the rebound start to fade or actually go into reverse, and new threats emerge," he added.
Wednesday's decline in Europe and the U.S. fueled a wave of selling in Asia earlier, where Japan's benchmark Nikkei 225 stock average slumped 246.76 points, or 2.6 percent, to 9,093.73, and Hong Kong's Hang Seng tumbled 517.93 points, or 3 percent, to 16,541.69.
Elsewhere in Asia, South Korea's Kospi shed 2.4 percent to 1,380.95. Australia's benchmark fell 3.4 percent, Shanghai's index lost 0.9 percent and Taiwan's stock measure shed 1.8 percent. India's Sensex fell 1.2 percent as the country's monthlong election ended.
The problems in the stock markets hit confidence in the oil markets too, with benchmark crude for June delivery down 65 cents at $57.37 a barrel.
In currencies, the dollar inched higher to 95.55 yen from 95.36 yen while the euro rose modestly to $1.3615 from $1.3559.
