Reply #42: Banks fuel rally in Europe shares, US worries remain

[Ghost Dog]

LONDON, Feb 26 (Reuters) - Financial stocks drove European shares up on Tuesday after Standard Chartered (STAN.L: Quote, Profile, Research) delivered upbeat results, but the outlook for the U.S. economy remained a concern.

Asia-focused Standard Chartered hit a three-week high, rising nearly 8 percent to top gainers on the broader European market.

European insurers including Axa (AXAF.PA: Quote, Profile, Research) and Allianz (ALVG.DE: Quote, Profile, Research) also featured among stocks on the rise as conviction grew in the investment community that a rescue package for the top U.S. bond insurers may be imminent.

The FTSEurofirst 300 index ended up 1.41 percent at 1,361.18 points, close to its day's high. Advancing issues outnumbered decliners by about 4.4 to one.

But U.S. data showed a sharp drop in consumer confidence this month, while producer price inflation picked up by more than expected in January, which did not augur well for future consumer spending -- the engine of U.S. economic growth.

"In general, the fundamental picture is still not that encouraging so we must place a big question mark on the durability of the current upswing," said UniCredit analyst Gerhard Schwarz.

/... http://www.reuters.com/article/marketsNews/idCAL2691978420080226?rpc=611