(AP) — European stock markets closed higher Friday after data showed the U.S. economy grew at its fastest rate in over six years during the final three months of last year. Wall Street rose but later lost some of those gains.

The euro, meanwhile, slid to a new six and a half month low against the dollar after the figures and amid ongoing worries about a possibility Greece will need a bailout.

In Europe, the FTSE 100 index of leading British shares closed up 42.78 points, or 0.8 percent, to 5,188.52 while Germany's DAX rose 68.46 points, or 1.2 percent, to 5,608.79. The CAC-40 in France ended 50.67 points, or 1.4 percent, at 3,739.46.

Europe's main markets had been trading even higher earlier but Wall Street's retreat from day highs and volatility associated with January's end — traders often close out positions on the last trading day of the month — prompted a modest pullback.

The Dow Jones industrial average was up 32.65 points, or 0.3 percent, at 10,153.11 around midday New York time, while the broader Standard & Poor's 500 index rose 1.87 points, or 0.2 percent, to 1,086.40.

The advance 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 and the strongest level of growth since the third quarter of 2003.

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.

"Although the surge in growth was broadly expected, beating already elevated expectations was a much needed shot in the arm for confidence after several weeks of steady decline in risk appetite," said Michael Woolfolk, an analyst at Bank of New York Mellon.

A batch of second-tier data also helped sustain the optimism — a survey of manufacturing conditions around the Chicago region and the consumer sentiment index from the University of Michigan both came in better than expected too.

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.

Kit Juckes, chief economist at ECU Group, said the S&P index — the broader U.S. stock market — is in "no-man's land" and added that "if the market closes below the 1,080 level, the mood will deteriorate significantly."

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.

The euro was down a further 0.6 percent at $1.3888, its lowest level since July 10, 2009.

Against the yen, the dollar was up 0.6 percent at 90.37 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 rose after the U.S. growth figures, with benchmark crude for March delivery up 58 cents at $74.22 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.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.

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