Friday 21.50 BST. Stocks pared gains late in the day, as confidence appeared to recede during the afternoon, but global equities still ended the day in positive territory, while Wall Street’s S&P 500 broke a two-week losing streak.

A soft start to the day on lingering eurozone worries and building concerns about the US economy turned into a more upbeat session, as US stocks rallied on high profile earnings from the likes of General Electric, restaurant group McDonald’s and Microsoft.

But the FTSE All-World stock index ended with a gain of just 0.3 per cent. Major industrial commodities were, however, firmer after recent selling. Copper gained 1.9 per cent to $3.69 a pound and Brent crude climbed 0.7 per cent to $118.79 a barrel.

Wall Street’s S&P 500 closed with a gain of just 0.1 per cent, having rallied as much as 0.7 per cent earlier in the session. But that was still enough to end the week with gains, and snap two weeks of losses. The FTSE Eurofirst 300 index closed up 0.5 per cent as financials rallied after a difficult period.

A 0.5 per cent dip for the US dollar index signalled some improving risk appetite, although other perceived bolt-holes were stronger, with 10-year Treasury and Bund yields, which move the opposite to bond prices, dropping 1 basis points apiece to 1.96 per cent at 1.70 per cent respectively. Gold was stable at $1,642 an ounce.

Even though US corporate results are carrying great weight on Friday, the market’s main considerations this week have been macroeconomic headline risks, particularly with regard to the eurozone fiscal problems and global growth.

On Thursday, a solid auction of Spanish bonds had eased fears about sovereign debt contagion, but it is clear that many investors remain very concerned about the Spanish economy’s health as the country undergoes a sharp austerity programme.

Yields on Madrid’s benchmark bonds are well below the 6.7 per cent hit five months ago, but at 5.98 per cent, up a few basis points on the day, they are elevated by historic standards when compared with Bunds.

Some dealers may also be wary of taking new positions ahead of the French presidential election which begins this Sunday. Indeed, the yield spread between German and French paper has risen to 140 basis points, its widest level since mid-January as the IOU’s of Paris underperform.

That said, the euro was in a distinctly more chipper mood on Friday, bolstered by news that the Ifo survey of German business sentiment rose in April for the sixth month in a row and also on hopes that the International Monetary Fund’s increased firepower can help support the struggling currency bloc if required.

The euro gained 0.6 per cent to $1.3221, breaking though the top of the $1.30-$1.32 range in which it has twitched for the past couple of weeks or so.

Another worry for investors is the recent deterioration in US economic data, the latest being Thursday’s disappointing housing sales, weekly jobless claims and Philly Fed manufacturing numbers. When added to fretting over a slowdown in China this does not provide a particularly rosy backdrop for the purchase of risk assets.

Ah, say the bulls, what about corporate earnings? With more than a fifth of S&P 500 companies having announced their first quarter figures, more than 80 per cent are considered to have beaten expectations. Big technology groups in particular have tended to “beat the Street” and the latest was Microsoft, whose news supported other tech stocks on Friday.

But bears will argue that those earnings expectations have been cut back so drastically over recent months that bettering them is relatively easy. Indeed companies including IBM, Intel and DuPont have seen shares slide, despite beating earnings expectations, suggesting investors do not see the bar of analyst forecasts as sufficiently high.

Bears may also point out that even though the S&P 500 is down nearly 3 from its near four-year high touched at the start of the month, it is still up 19 per cent since the November trough.

For now, though, the optimists seem to have the upper hand.

Earlier in Asia trading had been a bit of a jumble, though the tenor was dominated by Wall Street’s pullback overnight, leaving the FTSE Asia Pacific index off 0.5 per cent. The disappointing US economic data pressured exporters in the region, and resource stocks struggled on global demand concerns. Still, Sydney’s S&P/ASX 200 managed to eke out an advance of 0.1 per cent, while Shanghai rose 1.2 per cent.

In Seoul, chemical stocks lost ground after LG Chem, the country’s biggest chemicals producer, posted a worse than expected 42 per cent drop in first-quarter profit amid waning demand from China. leaving the Kospi index down 1.3 per cent. Tokyo’s Nikkei 225 dipped 0.3 per cent.

Additional reporting by Jamie Chisholm, Global Markets Commentator

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