uropean stock markets recovered earlier losses Friday following the news that the U.S. economy did not shed as many jobs in December as many investors were predicting.
Though non-farm payrolls fell by 524,000 during the month and the jobless rate swelled to 7.2 percent, many thought the figures would come in far worse.
"It's only good news relative to market expectations but whether that sponsors a sustained relief rally remains to be seen," said Neil Mackinnon, chief economist at ECU Group.
The FTSE 100 index of leading British shares was up 10.30 points, or 0.2 percent, at 4,515.67, while Germany's DAX rose 35.07 points, or 0.7 percent, to 4,914.98. France's CAC-40 was 26.72, or 0.8 percent, higher at 3351.05.
The better than anticipated jobs data also lifted expectations of how Wall Street will open. Dow Jones futures were up 34 points at 8,730, while the broader Standard & Poor's 500 futures rose 5 points to 911.70
Equity markets, which enjoyed a rally at the end of 2008 on hopes that fiscal and monetary stimulus measures would help the global economy recover later this year, had been on the retreat in the last few days amid fears about the scale of the recession in the U.S., where a raft of retailers reported dismal sales figures for December.
However the jobs data is dressed up, it was bad news for the U.S. economy, which shed more jobs in 2008 than it has at any time since the end of World War Two. The markets' pricing behavior over the coming months will depend on when the green shoots of recovery emerge, analysts say.
"There's still a tug of war in the markets between those who think the economy will recover in the second half of the year and those who think 2009 is a write-off, and that will dominate price action in the months ahead," said ECU Group's Mackinnon.
Given the apprehension ahead of the data, Asian markets had closed lower.
Tokyo's Nikkei 225 stock average fluctuated through the session, eventually ending 39.62 points lower, or 0.5 percent, at 8,836.80 by the close. Hong Kong's Hang Seng Index lost 38.47 points, or 0.3 percent, to 14,377.44, after rising earlier in the session amid what analysts said was speculation about central government aid for the power sector.
In South Korea, the Kospi shed 2.1 percent even as the country's central bank cut its key interest rate for the fifth time in three months to help shore up the country's sagging economy. Benchmarks in India, Taiwan and Singapore sank, but those in Shanghai and Australia advanced.
Oil prices fell moderately, with light, sweet crude for February delivery down 34 cents to $41.36 a barrel in electronic trading on the New York Mercantile Exchange. The contract overnight fell 93 cents to settle at $41.70.
In currencies, the dollar rose 0.2 percent to 91.26 yen while the euro was down 0.1 percent at $1.3690.
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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.