World stocks crept higher on Friday, extending gains following the United States' jump out of recession, while the dollar drifted ahead of more U.S. data that will add fuel to the recovery debate.

While news the world's largest economy had finally emerged from recession gave markets a shot in the arm on Thursday, concerns remain over world economic rebound.

Huge gains in risk assets since March are also making investors wary and preventing equity and commodity prices from moving significantly higher.

The MSCI world index <.MIWD00000PUS> inched up 0.3 percent following a 1.5 percent bounce on Thursday.

Stronger-than-expected U.S. growth conflicted with fears about the eventual withdrawal of massive stimulus measures in the United States and elsewhere.

These worries, as well as policy tightening signals from several central banks, earlier this week pushed stocks to their worst one-day falls since mid-August.

It will be more difficult for markets to rally further now, said Brian McAlinden, investment strategist at NCB Stockbrokers. You are not going to get the same positive surprises in economic news. The U.S. GDP was good news on the day but markets will remain worried about stimulus withdrawal.

European stocks <.FTEU3> were flat after a 1.8 percent rise on Thursday, with energy companies taking a hit as oil prices slipped.

Emerging stocks, hard hit by this week's shakeout, rose 0.7 percent <.MSCIEF> having gained a similar amount on Thursday. The index has fallen over 4 percent this week as traders booked profits off this year's stellar 70 percent rally.

Analysts highlighted weak U.S. housing data this week and the fact that U.S. spending was buoyed by car scrappage schemes -- now being wound down -- as reasons to give stock investors pause for thought.

The overall quality of the (U.S. GDP) expansion was not great. We also worry that the market is failing to realize how weak the fourth quarter is set to be, ING Bank told clients.

Markets are now awaiting Friday's University of Michigan confidence reading and the Chicago Purchasing Managers Index to see if the optimism generated by the GDP data can be sustained.

Investors are also cautious ahead of next week's central bank policy meetings in the United States, the euro zone and Britain, which could provide clues about the pace at which stimulus measures will be withdrawn.


Enthusiasm was also dissipating on commodity and oil markets.

Oil which shot up 3 percent on hopes the U.S. growth numbers were brightening the outlook for energy demand, slipped 0.2 percent though it remains just off one-year highs of around 82 per barrel hit earlier this month.

The dollar edged higher against the euro to a 2-1/2 week high after falling on Thursday when risk appetite returned. But it fell versus the yen on month-end selling by Japanese firms.

Forex traders also sold back higher-yield currencies like the Australian dollar -- which surged 2 percent on Thursday -- though these losses may be limited if the upcoming data confirms the recovery picture.

Higher-risk currencies are down slightly today, but yesterday's very positive GDP number has given support to the risk trade and that should carry over today and into next week, said Sverre Holbek, currency strategist at Danske Bank in Copenhagen.

(Additional reporting by Brian Gorman and Naomi Tajitsu, editing by Mike Peacock)