European share indices held gains yesterday as autos, media stocks and other sectors most exposed to the economic cycle reversed two sessions of declines and Wall Street opened steady as it digested the latest earnings reports.
Staffing agency Adecco, which lost a third of its market value on Monday after revealing problems with its accounting, led European gains as it rebounded 9.1 per cent.
Analysts said the world's top temporary jobs agency had sought to reassure them that the issues were about internal controls and did not relate to anything it had reported.
"The issue that we've got is that you can't 100 per cent know that, once those controls are checked, you're not going to find some kind of time-bomb in there," said one analyst who downgraded the stock but asked not to be identified.
By 1438 GMT, the FTSE Eurotop 300 index of pan-European blue chips was 0.6 per cent firmer at 975.9 points while the narrower DJ Euro Stoxx 50 index also rose 0.9 per cent to 2,114.0 points.
Stock market prices around Europe have slowed in their rapid appreciation from six-year lows touched last March as investors shift their attention to stocks which have so far lagged the rally.
"Quality is going to be very important going forward," said Robert Jukes, a strategist at Credit Suisse First Boston.
Unlike much of 2003, when the focus was on stocks highly geared to the global economic recovery, investors were now more interested in companies with improving earnings.
"The recent market moves are now more related to fundamentals - it's the second stage of the recovery story," Jukes said.
In New York the blue-chip Dow Jones industrial average was 0.2 per cent higher at 10,502.6 points, while the Nasdaq Composite Index rose 0.1 per cent to 2,113.4 points.
Europe's top software firm SAP was a weak spot after reporting its fourth-quarter software revenues fell three per cent, slightly weaker than a consensus of analysts' forecasts in a Reuters poll.
The stock fell 3.5 per cent, dragging French peer Cap Gemini down 4.3 per cent but other tech stocks remained in favour.
Telecoms equipment maker Alcatel led the sector, surging 6.5 per cent and taking its gains since the start of 2004 to 29 per cent.
German auto stocks shrugged off the continued strength in the euro, which dents their export earnings, led by a 3.5 per cent rise for luxury maker Porsche and a 2.1 per cent rally for BMW, although the overall European DJ Stoxx sector index was up 1.8 per cent.
Media stocks were also in favour as the merger of Britain's Carlton Communications and larger rival Granada moved closer to completion.