European Stocks Close Lower, Banks Higher

European shares recovered some of Tuesday's lost ground, led by a sharp bounce on Wall Street and a turnaround in some of the defensives sectors such as food stocks that had fallen earlier in the day.

Banks were still the top performing sector as shares in Barclays rose by more than 6 percent after a trading update soothed some investor concern about the bank's exposure to the U.S. subprime lending crisis.

The FTSEurofirst 300 index of top European shares was down 0.3 percent at 1,463.6 points, having hit a session low at 1,447.87 points.

The ratio of decliners to advancers was roughly 1:1, compared with a ratio of 4:1 earlier in the afternoon.

In New York, the benchmark U.S. stock indexes were up between 1.1 and 1.5 percent, having extended earlier gains.

London's FTSE-100 index was down 0.7 percent, while Frankfurt's DAX was down 0.5 percent and Paris' CAC-40 lost 0.4 percent.

Swiss food group Nestle featured among some of the big non-financial gainers, rising 1.1 percent, while pharmaceutical stocks also rallied. Novartis, Roche and AstraZeneca were up between 0.7 percent and 2.2 percent.