European shares rose early Thursday, extending a rally into a fourth day, as speculation grew that Federal Reserve Chairman Ben Bernanke would announce stimulus measures Friday.
At 0707 GMT, the FTSEurofirst 300 index of top European shares was up 0.8 percent at 943.88 points, after rising 1.4 percent on Wednesday, though it is still down more than 15 percent in 2011.
The banking sector .SX7P rose 1.3 percent. French bank Credit Agricole (CAGR.PA) rose 4.4 percent after posting a less-than-expected 10.6 percent drop in quarterly earnings, weighed by well-flagged losses in Greece, as investor fears over European banks' funding profiles intensify.
The market has got very excited. I don't think there will be quantitative easing, but there could be some sort of stimulus measures ... to help create jobs, Justin Urquhart Stewart, director at Seven Investment Management, told Reuters.
The good thing is that you can look at the corporates, some of which offer very good value. And the bad news is out there. There's no reason to think the market will fall significantly further.
Earlier, Asian shares rose Thursday, boosted by gains on Wall Street, but Apple skidded on the resignation of Steve Jobs and gold continued to struggle after running into a wall of profit-taking.
Shares of Apple (AAPL.O) tumbled as much as 7 percent in after-hours trading in a knee-jerk reaction to news that Jobs resigned as chief executive of the world's most valuable technology firm.
Apple will need to show that without Jobs it can come up with visionary products, Hendi Susanto, analyst at Gabelli & Co., told Reuters.
U.S. stock index futures were off 0.1 percent while the tech-heavy Nasdaq futures fell about 1.0 percent.
Spot gold fell to around $1,741.06 an ounce, down some 9 percent since hitting a record high of $1,911.46 Tuesday. COMEX futures for the precious metal fell over $100 Wednesday, the biggest one-day drop since 1980 and one of the steepest on record.
Bullion had surged $400 since July as worries about a global recession sent investors scrambling for the safe-haven asset. The intensity of the move prompted some analysts to call for gold investors to take money off the table.
While traders attributed the unwinding of long positions as the main factor driving down gold as well as U.S. Treasuries, the moves also came at a time when better U.S. economic data helped lighten the market's bleak mood.
Data on Wednesday showing a rise in new orders for long-lasting U.S. manufactured goods held out hope the ailing economy could dodge a second recession.
Still, the market focus is firmly on a speech by U.S. central bank chief Ben Bernanke on Friday at the Federal Reserve's annual conference in Jackson Hole, Wyo., which some investors hope will contain fresh steps to bolster the economy.
Basically people are covering short positions before Jackson Hole. I'm sure he will comment on the possibility of easing but I doubt he can explicitly indicate QE3, Hideyuki Ishiguro, assistant manager of investment strategy at Okasan Securities.
Looking ahead to the next month, the downside risk still looks larger than the upside risk, he added.
Japan's Nikkei share average advanced 1.4 percent, while stocks elsewhere in Asia, as measured by MSCI, put on 1.2 percent.
Australia's S&P/ASX 200 index, South Korea's volatile KOSPI and Hong Kong's Hang Seng index all gained more than 1 percent.
In the currency markets, the ebb and flow of hopes that the Fed will announce more stimulus created choppy moves in familiar ranges.
The euro traded around $1.4400, down from this week's peak near $1.4500. But it remained in the middle of a prevailing $1.4300-$1.4500 range.
This saw the dollar index .DXY edge back above 74.000, still stuck in slim range roughly between 73.400 and 74.400.
Against the yen, the dollar trimmed early gains to last stand at 76.84. It held above an all-time low around 75.94 plumbed Friday.
The dollar might rise a bit above 77.23 yen, its Aug. 22 high, if market players try to trigger stop-loss buying, a trader said.
Copper was little changed at $8,885 per metric ton, while U.S. crude was down 8 cents at $85.08 a barrel, down from a session high of $85.64.