European stocks rose on Friday as investors set aside concerns about the euro's debt crisis to focus on the impending release of monthly U.S. jobs data, which many hope will confirm a mild recovery in the world's largest economy.
Asian market indexes closed lower as they reacted to poor economic and financial indicators out of Europe the previous day. That stream of poor European data continued on Friday, with new information showing a drop in retail sales and economic sentiment among consumers and businesses. Unemployment in the 17-nation eurozone, meanwhile, remained at a worrying 10.3 percent.
Traders expect 2012 to be a tough one for Europe, as it slides back toward recession, and appeared relieved to have more upbeat U.S. economic indicators to focus on Friday.
Analysts are projecting hiring gains of about 150,000 when the U.S. Labor Department issues the December jobs report. That would mark a six-month stretch in which the economy generated 100,000 jobs or more in each month. Expectations of the data rose on Thursday, when the private payrolls agency ADP said its own calculations for hiring gains were much stronger than forecast.
An improvement in the U.S. labor market is crucial for global markets because American consumer spending accounts for a fifth of the world's economic activity. A recovery in the U.S. would also mitigate the impact of the sharp slowdown in Europe.
Britain's FTSE 100 rose 0.4 percent to 5,644.55, while Germany's DAX rose 0.6 percent to 6,131.25. France's CAC-40 rose 0.8 percent to 3,170.85. Ahead of the opening bell on Wall Street, Dow Jones futures rose almost 0.1 percent to 12,334 and S&P 500 futures gained 0.1 percent to 1,274.50.
Although upbeat U.S. data could push stocks higher, gains were likely to be limited by the lingering fears about Europe's debt crisis. Italy's benchmark 10-year bond yield edged further above 7 percent, a borrowing rate that is considered unsustainable over the longer term.
Italy, along with many other European governments, has to roll over huge amounts of debt in coming months. It is trying to restore investor confidence in its public finances to get those bond yields down and pay lower rates when it auctions its bonds to raise cash from capital markets.
Banks, meanwhile, are hurting due to fears that they will take big losses on their holdings of government debt and will struggle to raise new cash to plug those holes.
Trading in UniCredit, Italy's largest bank, was halted on Thursday after the stock lost a quarter of its value in two days. The bank said Wednesday it would need to offer huge discounts to investors to raise money in a new share sale. The stock was down another 11 percent on Friday.
Longer-term concerns about the euro and the region's financial system pushed the common currency to 15-month lows on Thursday. It recovered slightly on Friday, rising 0.1 percent to $1.2808.
Outside the eurozone, Hungary was sliding deeper into its own financial crisis. It had to pay a staggeringly high interest rate of 10 percent on its 12-month debt. That is far above the 7 percent level that forced Greece and Portugal to seek emergency bailouts to prevent them from defaulting on their debts.
Investor confidence in the country has deteriorated to the point that the country is considering asking the International Monetary Fund for a standby rescue loan.
Asian indexes ended mostly lower as they reacted to the previous day's European market jitters. Japan's Nikkei 225 Index closed 1.2 percent lower at 8,390.35. Hong Kong's Hang Seng index fell 1.2 percent at 18,593.06 and South Korea's Kospi fell 1.1 percent to 1,843.14. Benchmarks in Taiwan and Indonesia also fell. India and Singapore rose.
Benchmark oil for February delivery rose 60 cents to $102.41 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell by $1.41 to end Thursday at $101.81 in New York.