LONDON (AP) — Better-than-expected U.S. economic growth figures helped turnaround the mood in financial markets Friday.
Stock markets started the final day of the working week on the defensive following a disappointing after-hours earning statement from Apple on Thursday.
That all changed when government figures showed the U.S. economy grew by annualized rate of 2.0 percent in the third quarter. That was slightly better than predictions for a 1.8 percent rise and eased some of the concerns that continue to hang over the world's largest economy.
"Strength in consumer spending remains an encouraging feature to today's report into the final quarter," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. "As they say, never write off the consumer."
The figures were enough to prompt a rebound in European markets. Germany's DAX was 0.7 percent higher at 7,248 while the CAC-40 in France rose 0.9 percent to 3,441. The FTSE 100 index of leading British shares was 0.1 percent higher at 5,812. All three indexes had been sharply lower earlier.
In the U.S., the Dow Jones industrial average was up 0.2 percent at 13,126 while the broader S&P 500 index rose the same rate to 1,416. Futures markets had been predicting a lower opening until the growth figures were published. And in contrast to market expectations for a sizeable decline, Apple was trading flat.
The U.S. is likely to remain the focus in the markets at least until the presidential election. Though polls suggest President Barack Obama has an advantage in the electoral college over his challenger Mitt Romney, the margins are tight.
"The outcome will have an important bearing on market developments, including the exchange rate," said Neil MacKinnon, global macro strategist at VTB Capital.
Since Romney's advance in the polls over the past the past couple of weeks, the dollar has largely remained steady. In midafternoon London trade, the euro was flat at $1.2927.
Earlier in Asia, stocks suffered from the fallout from the Apple and Amazon reports. Downbeat U.S. housing figures also weighed on sentiment.
Japan's Nikkei 225 index slid 1.4 percent to close at 8,933.06 while South Korea's Kospi tumbled 1.7 percent to 1,891.43. Hong Kong's Hang Seng shed 1.2 percent to 21,545.57.
Mainland China's Shanghai Composite Index sank 1.7 percent to 2,066.21 and the Shenzhen Composite Index shed 2 percent to 840.51.
Oil prices recovered most of their earlier losses as stock markets improved — the benchmark New York rate was down 25 cents at $85.80 a barrel.