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Euro Stocks Close Higher on Central Bank Measures

European stocks ended frimly in the green after the Federal Reserve announced that it would act together with the European Central Bank, Bank of Canada, the Bank of England and the Swiss central bank to tackle the credit squeeze that has gripped financial markets.

The Fed will use an additional Term Auction Facility, which will accept a wider range of collateral, as well as currency swaps with the European Central Bank and the Swiss National Bank for up to six months to provide the markets with enough liquidity, it said in a statement.

The first Term Auction Facility will take place next Monday, for an amount of $20 billion and a 28-day maturity.

The European Central Bank and the Bank of England also announced they would increase the amounts offered at auctions for three-month funds to help banks get liquidity before the year end.

The ECB said it would conduct two US dollar liquidity-providing operations, in connection to the Fed ones, for a maturity of 28 and 35 days.

And the Bank of England will raise the amount of reserves offered in its operations on Dec. 18 and Jan. 15 to 11.35 billion pounds ($23.15 billion) from just 2.85 billion pounds.

The concerted effort is a big boost to markets' confidence, analysts said.

"The psychological benefit of having this is important," Arthur Hogan, from Jefferies, told "European Closing Bell."

"We need to break the logjam. I think this is going to help facilitate beginning that process," Hogan added.

Zara Sales Disappoint

Looking to individual companies, Zara owner Inditex reported a higher-than-expected nine-month net profit. But the Spanish retailer also said port that sales fell slightly short of expectations, raising concerns about the company's growth outlook and the stock closed 5 percent lower.

In the mining sector, Xstrata's shares ended 0.9 percent lower after the British company said it held preliminary talks about possible mergers, but no suitors have come forward with a proposal.

And London-listed BHP Billiton said it is considering other moves in its attempt to open takeover talks with rival Rio Tinto, which has rejected BHP's last two offers.

Rio Tinto challenged BHP Tuesday to make a formal bid by asking Britain's Takeover Panel to set a deadline for a final offer.

Meanwhile, shares of Conergy fell 14.3 percent after the in German solar power company announced it will cut 500 jobs and issued its second profit warning for the year.

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