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Asian Stocks End Higher; Europe Gains

The Associated Press

HONG KONG - Stocks in Asia ended higher and European shares were gaining Friday, following a recovery Thursday on Wall Street after strong profits at a handful of U.S companies buttressed optimism about the world's largest economy.

In Asia, select energy stocks benefited as crude oil prices traded near $71 a barrel. The dollar was modestly higher against the yen.

Investors were encouraged after U.S. markets snapped a four-day losing streak with the help of better-than-expected earnings from homebuilder Lennar(LEN Quote) and home furnishings chains Bed Bath & Beyond(BBBY Quote).

The news underpinned hopes that consumer spending, one of the engines of U.S. growth, was picking up after falling over the last year. It also helped investors shrug off another bleak sign that unemployment is rising.

Despite the gains, some investors don't expect the rally that began in March and started to taper off earlier this month to resume anytime soon.

"I think many investors are waiting for more confirmation that the macro economies are recovering," said Winson Fong, managing director at SG Asset Management in Hong Kong, which oversees about $2 billion in equities in Asia. "Without the fundamentals it's hard to see us moving sharply in one direction or the other right now."

In early European trading, France's CAC 40 gained 0.6%, Britain's FTSE 100 rose 0.7% and Germany's DAX advanced 1%. Wall Street futures were slightly lower.

Japan's Nikkei 225 benchmark inched higher by 81.31, or 0.5%, to 9,877.39, and Hong Kong's Hang Seng added 1.8%. South Korea's Kospi gained 0.1% and Australia's benchmark rose 1.2%.

On Thursday in the U.S, the Dow Jones Industrial Average rose 172.54, or 2.1%, to 8,472.40, after falling 40 points in the early going. It was the biggest point and percentage gain for the blue chips since June 1.

The broader S&P 500 index rose 19.32, or 2.1%, to 920.26.

Oil prices rose above $71 a barrel as investors mulled mixed signs about the strength of the U.S. economy and crude demand. Benchmark crude for August delivery added 79 cents to $71.02. On Thursday, it gained $1.56.

The dollar traded at 95.89 yen compared with 95.82 yen. The euro strengthened to $1.4026 from $1.4004.