Earnings cheer among utility firms and car makers boosted by the dollar's bounce sustained European blue-chips yesterday, though London-listed stocks led by advertising firm WPP dampened sentiment.

Investors applauding German utility RWE's pledge of strong dividend growth and restructuring plans drove the shares up six per cent to their highest point since September 2002 amid heavy volume.

The utility sector closed up 1.6 per cent at its highest level since July 2002, with British electricity firm International Power Plc jumping 8.1 per cent on plans to revamp its struggling US business.

Auto makers found favour as the dollar's bounce to near-one-month highs raised hopes for higher car exports to the United States and improved profits.

"The euro is certainly helping auto stocks," said Nigel Cobby at JP Morgan European Equities. "The market isn't expecting the dollar to rise dramatically, but it is beginning to discount that it might be close to a bottom."

Germany's DaimlerChrysler added 1.4 per cent, and domestic rival BMW rose 2.8 per cent. France's Renault gained two per cent.

But Italy's Fiat shed 2.2 per cent on news its car unit booked an operating loss of €97 million, almost half that a year earlier, but at the bottom end of forecasts.

The FTSE Eurotop 300 index of pan-European blue chips ended little changed at 1,007.99, below the session high of 1,017.49 points and the 19-month high of 1,019.34 set last week. Amid good volume trade, the numbers of gainers to losers was roughly equal.

The narrower DJ Euro Stoxx 50 index closed 0.33 per cent higher at 2,893.18.

Confidence was reinforced after the second reading of US fourth-quarter annualised gross domestic product showed growth of 4.1 per cent, above the consensus forecast of 3.6 per cent.

"There was some speculation after the trade report that the GDP data could be revised down," said Deutsche Bank economist Mark Wall. "The durable goods orders (on Thursday) suggested stronger investment spending, and that's what it was."

In New York, the blue-chip Dow Jones industrial average was a touch lower at around 10,573.19, and the technology-laden Nasdaq Composite Index had slipped 0.39 per cent to 2,024.57.