Wall Street gained as investors opted to focus on American corporate earnings that surpassed expectations, while the latest economic data bolstered the case for the Federal Reserve to maintain its stimulus measures.
Shares of Coca-Cola jumped, last up 5.4 per cent, as the company posted profit that beat forecasts. Johnson & Johnson also did better than expected, boosting its stock 1.9 per cent.
Investors bet that the latest economic data offered enough reasons for the Fed to keep at their efforts to fuel the pace of the world's largest economy.
The consumer price index unexpectedly slipped 0.2 per cent in March, industrial production expanded a better-than-expected 0.4 per cent last month, while factory output fell 0.1 per cent, and housing starts rose 7.0 per cent in March to the highest rate in almost five years.
"I don't think we should be complacent" about the economic outlook, Federal Reserve Bank of Chicago President Charles Evans said today in a speech, according to Bloomberg News.
"I would not be surprised if we end up doing this until late 2013, ultimately ending the program in 2014 at some point," he said, referring to the Fed's program of purchasing US$85 billion in government securities each month.
In afternoon trading in New York, the Dow Jones Industrial Average gained 0.77 per cent, the Standard & Poor's 500 Index rose 1.06 per cent, while the Nasdaq Composite Index advanced 1.17 per cent.
Meanwhile the International Monetary Fund downgraded its forecast for global economic growth. In its World Economic Outlook, the IMF lowered its prediction for worldwide expansion this year to 3.3 per cent, down from a previous estimate of 3.5 per cent.
"Recent policy actions in Europe and the United States have improved the short-term risk picture although dangers are still present," the Fund said in a statement. "Over the medium term, however, the balance of risks remains on the downside."
In Europe, the Stoxx 600 Index ended the day with a 0.8 per cent drop from the previous close. Benchmark stock indexes in Frankfurt, London and Paris weakened as well, sliding 0.4 per cent, 0.6 per cent and 0.7 per cent respectively.
Data showing that investor confidence in Germany, Europe's largest economy, shrank more than expected weighed on the mood. The ZEW Centre for European Economic Research's index of investor and analyst expectations slid to 36.3 in April from 48.5 last month.
Gold began the day with a further decline, before recovering later in the session. Gold for immediate delivery slid to US$1,321.95, the lowest since January 2011, before gaining 2.1 per cent to US$1,376.10 in London, according to Bloomberg. It's down about 28 per cent from its record high set in September 2011.
"I think everyone has to take a breath now ... but there are people who still want to sell and they haven't done so yet," David Govett, head of precious metals at Marex Spectron, told Reuters.