European stock markets turned broadly positive yesterday afternoon in line with shares on Wall Street, as investors digested a hotchpotch of economic data, ahead of a key decision on US interest rates.
Media leader Vivendi Universal continued to be hit by growing write-off fears but Swedish telecom gear maker Ericsson followed the Nasdaq higher as liquidity concerns eased ahead of its bumper rights issue.
At 1449 GMT, the FTSE Eurotop 300 index of pan-European blue chips was 0.3 per cent up at 947 points, having been more than one per cent weaker earlier in the day.
That left the benchmark 7.5 per cent off the five-year lows plumbed in July, when shares were routed against a backdrop of growing uncertainty over the outlook for economic growth and corporate profits.
The narrower DJ Euro Stoxx 50 index edged up 0.1 per cent to 2,674 points.
Data earlier showed US retail sales rose 1.2 per cent in July, with the core figure excluding auto sales rising 0.2 per cent. Both were bang in line.
"This is a positive guage of the temperature of the consumer. If they were really concerned about job losses and the possibility of a double dip recession, they wouldn't be going out and buying cars in the way they are," said Matthew Wickens, global economist at ABN Amro.
But others saw it differently. "The real question is where these car sales are coming from.
If they're coming from stocks, which looks to be the case, then its impact on GDP is zero," said Jane Edwards, senior international economist at Lehman Brothers.
"We'll get an indication of that when we see the industrial production data on Thursday but, given the recent ISM and employment reports the outlook doesn't look too bright."
Lending the bears a hand was German ZEW institute's expectations indicator for Europe's biggest economy, Germany, which showed its strongest drop in two years in August.
"This means the economic recovery has halted," ZEW President Wolfgang Franz said in a statement.
In New York the Dow Jones industrial average was flat while the tech-laden Nasdaq Composite jumped one per cent. Both indices began the session firmly in the red.
The Federal Reserve is due to announce its decision on US interest rates after European markets close yesterday. Although no change is expected, a growing body of opinion expects the US central bank to say the balance of risks in the world's biggest economy is tilted towards weakness.
ERICSSON, UBS JUMP Ericsson led the blue chip leaderboard, climbing 7.4 per after the Swedish telecom equipment maker said it will not have to ask shareholders for more money once its completes its looming $3.1 billion rights issue.
Switzerland's top bank UBS added 4.4 per cent after posting a second-quarter net profit of 1.331 billion Swiss francs that was above forecasts.
Wolters Kluwer soared 13.5 per cent after the Dutch publisher's half-year results beat expectations and the group maintained its full-year forecasts.
Vivendi Universal slipped 2.2 per cent after the Wall Street Journal Europe said the cash-strapped media group planned to take a charge of as much as 10 billion euros against its second-quarter earnings.
That was much higher than recent estimates and unnerved investors ahead of Vivendi's results on Wednesday.
Also down was German drugs and chemicals group Bayer as investors booked profits after three days of gains, ahead of a perceived ceiling in the market at 25 euros a share.
Elsewhere, paper stocks led basic resources down after Morgan Stanley cut its rating on the sector to "cautious" on worries about high coated paper inventories, which it said threatened its recovery.
The world's top packaging and board maker Stora Enso was 4.9 per cent weaker and fellow Finn UPM-Kymmene lost 1.8 per cent.