European, US recovery hopes shore up markets
A survey of the manufacturing and services sector across the European currency union showed activity rose to a 10-month high in January. Though it showed the economy as a whole was still likely contracting, the improvement suggests a recovery may be slowly taking hold.
After a weak end to 2012, the survey has added to evidence that conditions improved at the start of this year,'' said Jennifer McKeown, senior European economist at Capital Economics.
By midafternoon in Europe, Germany's DAX stock index was up 0.4 percent at 7,665 while France's CAC 40 was 1 percent higher at 3,697. Britain's FTSE 100 was up 0.1 percent at 6,285.
Spanish and Italian indexes, which led world markets lower on Monday due to concerns over the political situation in both countries, rallied. Madrid's IBEX was 2 percent higher while the FTSE MIB in Milan was up 1.4 percent.
Wall Street rose on the open, with both the Dow and the broader S&P 500 up 0.8 percent, at 13,996 and 1,508, after upbeat economic figures.
The Institute for Supply Management said its index of activity in the services sector declined slightly to 55.2 points in January from 55.7 in December. Despite the drop, which was in line with expectations, the survey showed hiring was increasing, a positive sign for the world's largest economy.
Separate figures showed U.S. home prices jumped by
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