Europe shares close higher after US rallies

European shares closed higher on Thursday afternoon, led by corporate earnings and strong jobs data from the U.S., which led stocks across the Atlantic to reach record highs.

The FTSEurofirst 300 index provisionally closed up 0.8 percent at 1,208.25 points, with media and travel stocks posting healthy gains.The FTSE 100 closed up 0.9 percent, while the CAC 40 closed up 1.3 percent. The Spanish IBEX and Italy's MIB had strong days, closing up 2 percent and 2.3 percent respectively.

The Dow Jones Industrial Average and S&P 500 rallied and set fresh highs on Wall Street, after weekly jobless claims dropped to the lowest level in four months, and Federal Reserve Chairman Ben Bernanke testified before congress on the economy for a second day.The Dow climbed above its previous all-time high of 15,542.40 and the S&P 500 topped its previous record of 1,687.18.

The U.S. was also buoyed by strong earnings from Morgan Stanley. Equity sales, underwriting and wealth management helped power Morgan Stanley to a 42 percent surge in second-quarter profit, continuing a streak of better-than-expected results from Wall Street investment banks.

(Read More: US jobless claims tumble sharply in latest week)

Back in Europe, the media and luxury sectors were aided by strong corporate earnings, plus U.K. data.

The world's third-largest advertising agency, Publicis, posted organic sales growth of 5 percent in the second quarter, compared to 1.3 percent in the first quarter. Shares closed 3.37 percent higher.

Plus, the U.K. saw retail sales increase 0.2 percent on the month, and 2.2 percent on the year. That's a second consecutive monthly rise in retail-sales volumes and adds to ongoing signs of a consumer-led recovery in the U.K.

However, the technology sector was a poor performer in European markets. Ericsson and SAP weighed bourses down after reporting second-quarter results.

SAP highlighted that a China slowdown was weighing on its revenues. It now expects revenues from software to grow by 10 percent this year, compared with a previous outlook for 11-13 percent growth. Shares of SAP closed lower by 1.1 percent.

(Read More: China slowdown weighs on tech giant SAP)

Ericsson, meanwhile, posted operating profit well below expectations on Thursday. Shares closed lower by 4.84 percent.

In addition, Finnish mobile maker Nokia said it shipped fewer phones than forecast in the second quarter, despite a 32 percent rise in sales of its flagship Lumia smartphone.

(Read More: Nokia misses estimates; sales to China halve)

In other news, Greece's government secured enough parliamentary votes to pass a public sector reform bill early on Thursday that allows for thousands of job cuts.The vote clears the way for the disbursement of the country's next tranche of its international bailout. German Finance Minister Wolfgang Schaeuble, who visited Athens on Thursday, offered Greece 100 million euros ($131 million) for a fund to promote economic growth, in a move unlikely to appease Greek protesters who resent his firm stance on austerity measures.

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