European stocks up as holiday slowdown begins

LONDON (AP) -- European markets bounced back Thursday as the traditional holiday slowdown began in earnest, rising a day after investors were rattled by the European Central Bank's huge loans to bolster the continent's banks.

Investors were spooked by the huge size of the ECB's euro489 billion ($639 billion) three-year loans Wednesday to 523 banks — its biggest credit infusion to date as authorities try to steady a financial system under severe pressure from Europe's debt crisis.

Although the loans will help make sure banks have enough money to lend next year, they don't address Europe's underlying problem of too much government debt.

With Christmas looming, trading is getting lighter by the day. The flow of news is also drying up — once a raft of U.S. economic figures are released later, there's very little on the economic calendar until the New Year. Analysts expect U.S. economic growth figures later to be left unrevised at an annualized rate of 2 percent and weekly jobless claims to remain below 400,000.

"With trading in many markets grinding to an almost complete standstill, even though price action remains choppy, it will take some large surprises ... to stir markets from their seasonal slumber," said Marc Ostwald, markets strategist at Monument Securities.

Figures earlier showing that Britain's economy grew by a slightly better-than-anticipated 0.6 percent in the third quarter had little impact, as the previous quarter was revised down by an equivalent rate to show zero growth.

Britain's FTSE was up, like others in Europe, trading 1.1 percent higher at 5,448. Germany's DAX rose 1 percent to 5,845 while the CAC-40 in France rose 1.2 percent to 3,067. The euro rose 0.2 percent higher at $1.3056.

Wall Street was poised for modest gains later — Dow futures were up 0.4 percent at 12,070 while the broader S&P 500 futures rose an equivalent rate to 1,241.

Asian markets traded lower following the previous day's retreats in Europe and the U.S. Investors were hoping that Beijing eases curbs on bank lending and real estate sales to revive slowing economic growth, but analysts expected no immediate changes.

"If expectations of an easier monetary policy do not materialize, the market will remain unstable, but even if some loosening does emerge, the room for gains is still quite limited," said Liu Kan, an analyst at Guoyuan Securities in Shanghai.

Tokyo's main index declined 0.8 percent to 8,395.16 and China's benchmark lost 0.2 percent to 2,186.3. South Korea's Kospi was down 0.1 percent to 1,847.49.

In the oil markets, trading was lackluster with benchmark crude for February delivery up 12 cents at $98.79 in electronic trading on the New York Mercantile Exchange.