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European Shares Close Higher After US Data
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European shares closed higher on Thursday after data showed U.S. jobless claims dropped to a three and half year low and the New York Fed's "Empire State" manufacturing survey hit its highest level since May.
The pan-European FTSEurofirst 300 [.FTEU3
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] index of top shares was up, after earlier being as low as 952.40.
Stocks rose across the board on Thursday, led by insurer Old Mutual [OML-LN Loading... ()], up more than 10 percent after announcing it is to sell its Nordic business for $3.2 billion to cut debt and return surplus capital from the deal to shareholders.
The STOXX Europe 600 Insurance Index [.SXIP
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] closed higher.
The STOXX Europe 600 Banking Index [.SX7P
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] also rose on Thursday, but is down more than 35 percent in 2011, with several banks having suffered writedowns on exposure to euro zone peripheral debt
![[cnbc explains]](http://media.cnbc.com/i/CNBC/Sections/News_And_Analysis/_News/_CNBC_EXPLAINS/_IMAGES/CNBC_explains_icon1.gif)
.
Credit Agricole [CAGR.PA
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] fell after Fitch Ratings downgraded its Long-term Issuer Default Rating to A-plus from AA-minus, and the French bank warned that it would post a loss for 2011. It will write off 2.5 billion euros ($3.24 billion) worth of assets and cut 2,350 jobs in a cull of its investment banking operations.
Index Decline
The pan-European FTSEurofirst 300 index is down more than 14 percent this year and has only recovered about a third of its fall from its February high to its September low.
Investors have cut their exposure to risky assets such as stocks following an escalation of the euro zone debt crisis and the United States losing its triple-A credit rating. Weak data from major economies has sparked concern they may go back into recession.
The decline in the euro zone's private sector eased a little this month, but a recession still looks inevitable with the region's periphery struggling badly, a key business survey showed on Thursday.
"People are realizing that it will take a while before things get better. In the short term, we are stuck with some very nasty economic data and going into 2012, economic conditions will not be very favorable," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
Technical analysts said indexes would struggle to break though key levels.
"Investors are looking for some value in certain beaten-down stocks," said Bill McNamara, technical analyst at Charles Stanley.
"But this rally is likely to be short-lived as there seems to be no follow-through buying after a good day. Investors are losing patience with the market and are starting to think that there isn't going to be a positive and lasting solution of the euro zone problems anytime soon."
One positive for equities on Thursday was Spanish bond yields falling, after the country surprised markets by selling far more than the amount targeted in its last bond sale of the year, although its cost of borrowing remained close to euro-era highs.
Bond yields for Spain and Italy have been a major focus for equity investors in recent weeks as they have approached the levels that prompted countries such as Greece to require a bailout.
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Data is a real-time snapshot *Data is delayed at least 15 minutes
