European stocks closed higher yesterday, with pharmaceuticals among the best performers, after a raft of US macro-economic data ahead of the Thanksgiving Day holiday was mostly positive.
The FTSEurofirst 300 index of top European shares rose 0.5 per cent to close at 1,021.95 points, having moved as high as 1,026.85 and eased to 1,015.76.
Around Europe, UK's FTSE 100 index ended the day 0.8 per cent higher, Germany's DAX index rose 0.6 per cent, and France's CAC 40 was up 0.7 per cent. Wall Street was higher around the time European bourses were closing. The Dow Jones, S&P 500 and Nasdaq Composite were up 0.4 per cent. US markets will remain closed for the Thanksgiving Day holiday today, and will close early tomorrow. Among drugmakers, GlaxoSmithKline, Novartis, AstraZeneca, Roche and Sanofi-Aventis rose between 0.5 and 2.5 per cent.
The European benchmark is up more than 58 per cent from its lifetime low of March 9, as investors have become more confident on the prospects for economic recovery.
But the DJ Stoxx Health Index has lagged the rally, up 31 per cent in the same period.
Initial claims for state unemployment benefits in the United States slid to a seasonally adjusted 466,000 in the week ended November 21, from a revised 501,000 in the prior week, the Labour Department said.
Figures also showed that US October personal spending rose more than expected in October and personal income was up 0.2 per cent against a forecast of 0.1 per cent. But new orders for long-lasting US manufactured goods fell unexpectedly last month.
"The market is facing a barrage of data, and we still believe there will be further improvement in economic activity, though it has been more mixed lately," said Gerhard Schwarz, head of global equity strategy at UniCredit, in Munich.
Other data, notably that showing higher home sales last month and stronger readings from the Reuters/ University of Michigan Surveys of Consumers, supported the market.
Earlier, some traders worried as Dubai's government said it would ask creditors for two of its flagship firms for a debt standstill sending the cost of insuring its debt against default soaring and bond prices tumbling.
"It's tough to judge as we don't know the detail, but it shows there's still some risk coming from the credit crisis," said UniCredit's Schwarz.
Compass Group, the world's biggest caterer, closed 6.1 per cent higher after it reported a 33 per cent rise in full-year pre-tax profit, at the top end of market expectations.
Vivendi gained 4.3 per cent after Exane BNP Paribas upgraded the stock to "outperform", saying Europe's largest entertainment group may positively surprise investors on both operating and M&A issues.
Aerospace major EADS dropped 3.8 per cent after Natixis and Citigroup trimmed their price target on the stock and as the dollar drifted lower against the euro, traders said.
London Stock Exchange fell 3.8 per cent after first-half profit fell.
Mining stocks gained ground, rising with metal prices, as gold prices hit record highs above $1,180.00 an ounce, lifted by a report that India may consider buying more bullion from the International Monetary Fund. A weaker dollar, trading at more than $1.50 against the euro, also helped boost prices.