LONDON (AP) -- Markets remained firm despite soft weekly U.S. jobless figures Thursday as investors continued to price in the likelihood of policymakers enacting further stimulus measures over the months to come.
Though Federal Reserve chairman Ben Bernanke did not indicate in his two-day testimony to lawmakers that a stimulus was imminent, his comments led investors to believe further action remained an option. The Fed has already completed two programs of asset purchases, which have the effect of increasing the supply of money, much which ends up in financial markets.
Chinese monetary authorities are also expected to do more to shore up economic growth in the world's second-largest economy after recent figures showed the annual rate of growth down at a three-year low of 7.6 percent.
"This more positive momentum is in part supported by global monetary easing hopes," said Vassili Serebriakov, an analyst at Wells Fargo Bank. "There has been talk of a possible further cut in bank reserve requirements by China's monetary authorities, while Fed easing expectations are also running high."
In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 5,714 while Germany's DAX rose 1.1 percent to 6,758. The CAC-40 was 0.9 percent higher at 3,263.
In the U.S., the Dow Jones industrial average was up 0.4 percent at 12,915 while the broader S&P 500 index rose 0.4 percent to 1,379.
The advance in the U.S. came in spite of a 34,000 increase in weekly jobless claims to a three-week high of 386,000. The increase more than retraced the previous week's fall.
However, the impact in the markets was muted given the previous week's figure was revised up, raising questions about the underlying picture.
"It is hard to judge whether the picture is better or worse although the weight of other anecdotal evidence surrounding the labor market tells us things are slightly worse," said Andrew Wilkinson, senior market strategist at Miller Tabak & Co.
The positive tone in markets has also been helped by some solid corporate earnings from many U.S. banks, such as Goldman Sachs, and companies like IBM and eBay, helping offset ongoing worries over European debt levels.
A Spanish auction earlier did little to alleviate concerns over the country ahead of a Friday conference call between eurozone finance ministers. The ministers are expected to back the release of the first batch of funds for the bailout of Spain's banks
Spain did manage to sell about €3 billion ($3.67 billion) in medium-term debt, but it had to pay high interest rates due to worries about the government's ability to right its finances.
Concerns over the debt levels of many European countries have weighed heavily on the euro over the past few weeks, sending the single currency down to a two-year low below $1.22 earlier this week. By midafternoon, the euro was down 0.4 percent at $1.2234.
Earlier in Asia, Japan's Nikkei 225 rose 0.8 percent to 8,795.55 and South Korea's Kospi jumped 1.6 percent to 1,822.96. Hong Kong's Hang Seng was up 1.7 percent 19,559.05 and China's Shanghai Composite Index added 0.8 percent to 2,184.84.
Oil prices were higher amid renewed tensions in the Middle East — benchmark crude for August delivery was up $2.42 at $92.30 a barrel in electronic trading on the New York Mercantile Exchange.