European stock markets and Wall Street futures spiked higher Friday after data showed the U.S. economy grew at its fastest rate in over six years during the final three months of 2009.
In Europe, the FTSE 100 index of leading British shares was up 64.80 points, or 1.3 percent, to 5,210.54, while Germany's DAX rose 85.58 points, or 1.5 percent, to 5,625.91. The CAC-40 in France was 42.12 points, or 1.1 percent, at 3,730.9.
Wall Street was also poised to join in the rally -- Dow futures were up 50 points, or 0.5 percent, at 10,112 while the broader Standard & Poor's 500 futures rose 5.7 points, or 0.5 percent, to 1,084.90.
The bulk of the gains came after the Commerce Department reported that the U.S. economy grew by an annualized rate of 5.7 percent in the fourth quarter, a full percentage point higher than expected.
As expected, the main impetus behind the growth was a rebuilding of inventory levels in the wake of the recession's end, though consumer spending and exports were strong too.
Neil Mackinnon, global macro strategist at VTB Capital, said the markets are fully aware that much of the improvement was due to inventories, but that the data may ease concerns of a possible double-dip recession in the U.S.
"Next Friday's U.S. jobs data for January is probably more relevant in determining short-term direction in the markets," he said.
"In the meantime, I think the correction in risk assets might still have some further downside....the end-month close in the S&P index tonight is important in this regard and I would not want to see a close too far below the 100 day moving average at 1,089," he added.
Friday's gains have not yet covered for Thursday's losses when European and U.S. stocks fell sharply after soft jobs data stoked concerns about the pace of the U.S. economic recovery ahead of next week's closely-watched nonfarm payrolls data for January.
The recent weakness in stocks -- the major indexes are down around 7 percent over the last couple of weeks -- has generated fears that the ten-month bull run in equities has come to a halt.
There are many reasons cited for the retreat, including fears of upcoming interest rate increases around the world, notably in the U.S., and China, and uncertainty surrounding President Barack Obama's plans to reform the U.S. banks.
Investors are also increasingly unnerved by rising debt levels in European countries like Greece and Portugal.
Greece was once again in the headlines Friday with a number of reports suggesting that the country may end up having to be bailed out by its partners in the European Union if it is unable to raise money in the bond markets.
Worries about Greece have dogged the euro for the last couple of months.
The euro was down a further 0.1 percent at $1.3962, having earlier fallen to a six-month low of $1.3913.
Against the yen, the dollar was up 0.9 percent at 90.70 yen.
Earlier, Asian stocks responded to Thursday's sharp falls in Europe and the U.S.
Japan's Nikkei 225 stock average tumbled 216.25 points, or 2.1 percent, to 10,198.04 while Hong Kong's Hang Seng index slid 234.38 points, or 1.2 percent, to 20,121.99.
South Korea's Kospi fell 2.4 percent, to 1,602.43 and Shanghai's main index dropped another 0.2 percent. Australia's benchmark tumbled 2.2 percent, its resource-heavy market dragged lower by easing commodity prices.
Oil prices lingered near a six-week low below $74, with benchmark crude for March delivery unchanged at $73.64 a barrel. The contract lost 3 cents to settle at $73.64 on Thursday, the lowest since Dec. 14 when crude dropped to $73.46.
AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.