EUROPE MARKETS: European Stocks Get A Boost After U.S. Data

By Barbara Kollmeyer

MADRID (MarketWatch) -- European stocks turned higher on Friday as U.S. economic data inspired some buying in a market jittery ahead of next week's Federal Reserve policy meeting, with gains for BMW and utility stocks in London providing support.

The Stoxx Europe 600 index rose 0.2% to 266.32 points in afternoon trading.

Investors digested a string of U.S. economic reports. Stocks got a boost from the release of U.S. GDP data that showed a slightly faster pace of growth for the third quarter.

Separately, the Chicago PMI in October rose to 60.6 from 60.4, stronger than the reading of 57 that was expected. Investors appeared to shrug off another economic report showing a decline in U.S. consumer sentiment in October.

The bigger focus for markets in Europe and elsewhere remains the potential for a further round of quantitative easing from the Fed, which holds a monetary-policy meeting early next week.

Bernard McAlinden, strategist at NCB Stockbrokers, said the markets have been checking themselves ahead of that meeting. "They had run ahead on quantitative easing and more recently have been tempering expectations, and by now they've possibly adjusted," he said.

In London, the U.K. FTSE 100 index rose 0.3% to 5,691.98, with shares of utility companies leading on the upside after Scottish & Southern Energy PLC said it was raising prices for household gas by 9.4% on Dec. 1.

The news triggered gains across the utility sector with Centrica PLC up 2.8%, Severn Trent PLC up 2.4% and United Utilities Group up 2.3%.

Shares of British Airways dropped 2.7%. The firm said it returned to six-month profit, but it was cautious on the outlook for its business.

"While positive, the economic environment continues to be subject to uncertainty, to which the increase in APD [air passenger duty] is unhelpful. We continue to focus on managing our costs," the airline said.

Miners, which helped the market break a two-session losing run on Thursday, were pushing lower on Friday. Shares of Xstrata PLC fell 1.2% and Rio Tinto PLC (R) lost 1.4%.

Utility shares were also rising in France, with the CAC 40 index up 0.2% to 3,841.02. Shares of GDF Suez SA rose 1.6% and Electricite de France SA gained 1%.

Shares of French energy giant Total SA (TOT) fell 0.1%, paring earlier losses as the firm reported a sharp rise in quarterly profit, buoyed by higher oil and gas prices.

Germany's DAX 30 index rose 0.2% to 6,591. Shares of BMW AG rose 3% after an upgrade to buy from neutral by Goldman Sachs, which said it continues to see "significant value" in the auto sector.

The investment bank cut PSA Peugeot-Citroen SA to sell from neutral, saying the company faces structural challenges. Shares fell 0.4% in Paris.

Shares of Daimler AG rose 1.3%, recovering from an earlier fall after the car maker was downgraded to hold from buy at Societe Generale.

A leading decliner in Germany was retailer Metro AG . Shares slumped 2% after HSBC cut it to neutral from overweight, saying the firm's valuation is now in line with its peers.

In Sweden, shares of tool and machinery maker Sandvik AB fell nearly 5% after the company missed analysts forecasts for third-quarter profit.

On the economic front in Germany, data showed retail sales dropped 2.3% in September from the prior month.