Euro, US stocks gain on European progress

The euro, U.S. stocks and crude oil rose on Thursday after an Italian debt auction went better than feared and news from Europe eased concerns over a potential euro zone break-up.
European shares, however, ended slightly lower.
Italy moved closer to a national unity government, following Greece's lead in seeking a respected veteran European technocrat to pilot painful economic reforms in an effort to avert a euro zone bond market meltdown.
Italy paid its highest yield in 14 years to sell 12-month debt and while there was relief the sale went smoothly, worries festered that Italy's borrowing costs were unsustainable.
The euro pared gains as did U.S. stocks, with the Nasdaq briefly turning negative after Green Mountain Coffee Roasters' weak quarterly revenue rattled its growth outlook, causing its shares to plunge 37%.
European shares fell in choppy trade as uncertainties over the selection of a new leader in Italy added to investors' jitters.
The euro still pulled away from a one-month low against the U.S. dollar and Brent oil prices climbed above $113 a barrel as a weak dollar and an unexpected drop in U.S. oil stocks outweighed concerns about the euro zone debt crisis.
The euro was up 0.2% at $1.3578.
U.S. economic data on jobs and the trade balance was viewed as favorable, but markets remained focused on Europe.
"Data will take a back seat to developments in Europe," Omer Esiner, chief market strategist at Commonwealth Foreign Exchange in Washington, said.
A rise in Italian yields will unsettle investors, as they did on Thursday when a spike to record level sparked a selloff.
"We've seen a relative calm in Italian bond markets today, but a rise back above 7% on the 10-year will see the euro continue to fall," Esiner said.
The Dow Jones industrial average was up 71.90 points, or 0.61%, at 11,852.84. The Standard & Poor's 500 Index was up 6.35 points, or 0.52%, at 1,235.45. The Nasdaq Composite Index was up 2.58 points, or 0.10%, at 2,624.23.
The FTSEurofirst 300 index of leading European shares fell 0.4% to 962.27 points.
U.S. Treasury debt prices extended losses in the wake of data on weekly jobless claims and September international trade that was generally viewed as favorable.
Signs that the political deadlock in Italy may be easing also pushed bond prices lower, although safe-haven assets were expected to stay underpinned by worries about the ability to pay the country's debt burden.
The benchmark 10-year U.S. Treasury note was down 57/32 to yield 2.04%.
"The focus is what's happening in Europe, and how our numbers here (U.S. data) could change in the future due to the slowdown in Europe," said Rick Meckler, president of investment firm LibertyView Capital Management in New York.
New U.S. claims for unemployment benefits fell last week to their lowest since early April and the trade deficit unexpectedly shrank in September, pointing to a slight improvement in the economic outlook.
Brent crude rose 76 cents to $113.07 a barrel.
The U.S. crude oil contract was up $1.34 at $97.08 a barrel.
Gold fell more than 1% as worries about a potential debt default in Greece and a deepening debt crisis in Italy weighed on market sentiment and pushed investors to liquidate commodity assets.
Spot gold prices fell $26.59 to $1,744.90 an ounce.