LONDON (AP) -- The Federal Reserve's vow to support the U.S. economy for as long as needed helped shore up markets Friday despite growing concerns over the scale of the slowdown in China.
A mixed batch of U.S. earnings kept the buying in check as did a weaker than anticipated consumer sentiment survey from the University of Michigan.
This week has been largely positive in stock markets, especially after Fed chairman Ben Bernanke said on Wednesday that the U.S. needs "highly accommodative monetary policy" -- or low interest rates -- "for the foreseeable future."
The S&P 500 index closed Thursday at an all-time high as investor fears that the central bank will pull back on its economic stimulus too quickly were eased. The Fed is buying $85 billion a month in bonds to keep interest rates low and to encourage spending and hiring.
"Equities are still subject to the positive bias established by Bernanke's comments," said David White, a trader at Spreadex.
In Europe, the FTSE 100 index of leading 100 shares was broadly unchanged Friday, up 0.02 percent, at 6,544 while Germany's DAX rose 0.6 percent to 8,212. The CAC-40 in France, underperformed, trading 0.3 percent lower at 3,856.
In the U.S., the Dow Jones industrial average was off 0.2 percent at 15,422 while the broader S&P 500 index dropped 0.1 percent to 1,673.
U.S. traders had a raft of earnings news to digest. While profits at big banks Wells Fargo and JP Morgan came in better than expected, UPS cut its profit outlook and said it's seeing a slowdown in U.S. industry.
Meanwhile, the University of Michigan's main consumer confidence index fell slightly, to 83.9 points in July from 84.1 in June. The median forecast in the markets was for a modest rise to 84.7.
The dollar continued to recoup some of the losses it posted in the wake of Bernanke's pledge, with the euro trading 0.08 percent lower at $1.3084 and the dollar 0.32 percent higher at 99.29 yen. The dollar suffered widespread selling after Bernanke's comments as investors priced in a growing likelihood that the Fed's monetary policy will remain loose for the time being. Looser monetary policy tends to weaken a country's currency.
While the main focus in markets during the latter part of the week has been on the Fed, investors have a number of other issues to contend with, notably the state of the Chinese economy, the world's second-largest.
Surprisingly weak trade figures earlier this week raised the prospect that China's slowdown will be sharper than anticipated as China's central bank tightens credit to reduce financial distortions. China announces April-June growth figures on Monday morning and the mood ahead of the release was nervous -- the main index in Shanghai fell 1.6 percent to 2,134.50.
"China could be a cloud on the horizon after the finance minister suggested that growth could come in at 7 percent for this year, which is below the government's official forecast as well as a whole host of others," said Michael Hewson, senior market analyst at CMC Markets.
Europe's debt crisis also remains in the spotlight amid ongoing concerns over the Portuguese government and whether the country may need another bailout.
However, the overall European concerns have been contained somewhat this week by the news that Greece has managed to get its next batch of bailout cash without too much trouble.
Investors got some further relief Friday with a broadly positive assessment of Ireland's public finances by the Standard & Poor's ratings agency. S&P said there is "more than one-in-three probability that Ireland could over-achieve its fiscal targets and reduce its government debt faster than we currently expect." As a result, it revised its outlook on Ireland's BBB+ rating to positive.
Earlier in Asia, Japan's Nikkei 225 index closed up 0.2 percent at 14,506.25 while Hong Kong's Hang Seng dropped 0.8 percent to 21,277.28. Australia's S&P/ASX 200 was up 0.2 percent at 4,973.0.
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