In Europe, Frankfurt’s DAX pushed 1.2% higher at 13,434.45 points, while London managed to break a four-day losing streak despite poor UK retail sales data. The FTSE 100 closed 0.4% up at 7,730.79 points.
Elsewhere, Paris’ CAC 40 closed 0.6% up at 5,526.51 points, while the EURO STOXX 50 closed 0.8% up at 3,648.91 points.
IG analyst Joshua Mahony said the “disappointing set of retail sales figures should be put in the context of shifting shopping habits”.
British retail sales slid 1.5% in December from the previous month after consumers had brought forward their Christmas shopping, official data showed.
Retail sales had already jumped by 1.0% in November, boosted by Black Friday price reductions, the Office for National Statistics said.
“Investors don’t appear particularly bothered about the prospect of a government shutdown, with the assumption being that one will eventually be signed and any economic impact will be minor or non-existent,” said Craig Erlam, senior market analyst at trading firm OANDA.
The Dow was down marginally in late morning trading, but the S&P 500 and Nasdaq Composite indices were both in the green as lawmakers bickered over a federal funding deal, which must be passed by midnight on Friday US time.
The House of Representatives on Thursday approved a short-term spending bill to keep the government open after funding runs out at midnight (0500 GMT Saturday), but the measure appeared to be dead in the Republican-controlled Senate.
Leaders of both political parties were pointing fingers at one another.
Analysts say a government shutdown could damage the economy, particularly sectors that do extensive business with the government and especially if it is prolonged.
An extended shutdown in 2013 hit the US economy and led to a downgrade of its sovereign debt rating.
But for the moment, analysts are not too concerned.
Fitch Ratings said a shutdown in itself would not impact the US government’s top rating, but could further destabilise budget policy-making and lead to brinkmanship over raising the debt level before the US Treasury runs out of extraordinary measures to fund the government in March or April.
“Investors don’t really fear a shutdown as they don’t foresee it happening, but it has cast enough doubt over the stock market to curtail buying momentum,” said market analyst David Madden at CMC Markets UK.
“American stocks have enjoyed such a positive run lately, these concerns are the perfect excuse for profit taking.”
In a separate development yesterday, the International Energy Agency said the United States is set to overtake Saudi Arabia as the world’s number two oil producer after Russia this year, as shale companies ramp up drilling.
