LONDON ( The Deal) -- European stocks staged a relief rally on Thursday after Federal Reserve Chair Janet Yellen indicated the world's most powerful central bank will keep interest rates low for some time after the Fed cut its 2014 U.S. growth forecast even as it pared its monthly bond buying program by $10 billion to $35 billion.
Yellen's hints on rates, which came after a two-day policy meeting, helped counter increasing nervousness in the wake of the Iraq crisis and pushed the FTSE 100 in London up 0.87% at 6,837.39. In Frankfurt, the DAX was also up 0.87% at 10,016.84, and in Paris the CAC 40 rose 1.02% to 4,576.38.
In the U.K., May retail sales declined 0.5%, in line with expectations and the first monthly drop in four months. Rather than being a sign of economic weakness, the slide resulted from a steep drop in food sales, which had surged the previous month thanks to a late Easter.
Rolls-Royce Holdings rose over 6% and was the lead gainer on the FTSE 100 after announcing a 1 billion pounds ($1.7 billion) share buyback with the proceeds of the sale of energy-equipment assets to Siemens (SI).
Hedge fund manager Man Group was up almost 5% after announcing it had agreed to pay up to $494 million for Numeric Holdings of Boston. The price was lower than earlier expectations, with Man's initial outlay only $219 million. Numeric management will keep a 18.3% stake in the company but Man has the right to buy them out after five years for $275 million.