European stock markets closed higher Friday in line with a positive opening on Wall Street and despite news of a sharp fall in US consumer confidence.

Market sentiment received a boost from a report showing that the European Union finally emerged from recession in the third quarter.

In London the FTSE 100 index closed at 5296.38 points, up 0.38 percent, with investors excited about the planned merger of British Airways and Spain's airline Iberia.

The deal is seen as enabling the new merged company to make big savings while strengthening its hand in competition with Lufthansa of Germany and French-Dutch group Air France-KLM.

In Paris the CAC 40 slipped just 0.06 percent to 3806.01. The Frankfurt the Dax gained 0.40 percent to end the week at 5686.83 points.

Elsewhere there were gains of 0.32 percent in Milan, 0.27 percent in Madrid, 1.03 percent in Brussels and 0.10 percent in Amsterdam. The Swiss Market Index fell 0.07 percent.

Wall Street sentiment was lifted by better-than-expected profits from Walt Disney Company and US data showing a rise in global trade flows.

The Dow Jones Industrial Average had risen 0.88 percent to 10 287.18 at mid-day while the tech-heavy Nasdaq had added 0.54 percent to 2160.54.

The main stock indexes were hovering close to their highs for 2009 and on track for a third weekly increase.

Momentum was helped by results late Thursday from Disney, which reported a quarterly profit of $895-million, down 25 percent from a year ago but better than expectations.

The US trade gap rose to $36.5-billion, according to new data. The report showed a rise in both imports and exports, underscoring improved trade flows that had fallen with the global economic slump.

Although a higher trade deficit is normally negative, the data "is being viewed by the market in a positive context given its underlying message conveying a pickup in global trade," said Patrick O'Hare at Briefing.com.

Bonds were steady. The yield on 10-year US Treasury bonds rose to 3.448 percent from 3.446 percent Thursday and on the 30-year bond edged up to 4.387 percent from 4.386 percent. Bond yields and prices move in opposite directions.

There was also disappointing US data, with the University of Michigan consumer confidence index showing a sharper-than-expected fall in November from October.

The report injected some tension on European markets late in the day. But in Paris analyst Yves Marcais of Global Equities said that while the reading was troubling, "we have in the past seen much lower levels."

The index dropped to 66 points in November from 70.6 in October. Analysts had foreseen a reading of 71.

In London British Airways shot up 0.93 percent while its new partner Iberia suffered a 3.15 percent plunge after announcing a third quarter net loss of 16.4 million euros.

Mining shares were hit with a bout of profit-taking. Xstrata shed 1.74 percent and Antofagasta 1.36 percent.

In Paris oil services group Vallourec lost 4.30 percent on the day after reporting a 57 percent decline in third quarter net earnings.

Media and telecommunications group Vivendi gained 0.97 percent on confirmation of its operating earnings target for 2009.

In Frankfurt Commerzbank fell 2.58 percent on a rumor that the German state, which holds a 25 percent stake in the bank, was considering pulling out.

Elsewhere on Friday, Tokyo share prices fell 0.35 percent, dropping for a second straight day, as dealers tracked losses on Wall Street where fresh jitters emerged about the health of the global economy.