North American markets end day with gains

North Americanmarkets closed Friday withgains, even as investors tried to dissect mixed economic signals on the U.S. economy.

In Toronto,the S&P/TSX composite index eked out a gain of2.40points, ending at12,542.20, up 3.1 per cent from the close a week earlier.

In New York,theDow Jones industrial average retreated from earlier gains of more than 200 points butstill closed up 125.71 points, or 1.1 per cent, at 11,269.02, ending a week of wild swings down just 1.5 per cent from the close on Friday, Aug, 5.

AU.S. government reportsaid consumers spent more on autos, furniture and gasoline in July, pushing up retail sales by the largest amount in four months. But asurvey on consumers' feelings about their personal finances and the economy reached an almost30-year low.

The wild market swings that hadso rattled investors in the past week had not reappeared by mid-afternoon Friday.

September crude futures finished the day lower by34 centsat $85.38 US a barrel.

December gold closed down$8.90 US an ounce at $1,742.60, driving the S&P/TSX gold index 1.7 per cent lower.

The loonie closeddown0.24 of a cent at 100.94 cents US.

The roller-coaster Dow:

Monday: Down 634.76

Tuesday: Up 429.92

Wednesday: Down 519.83

Thursday: Up 423.37

OnThursday, theDow rose 423 pointsandToronto's benchmark index finished 341 points higher. Both markets have been the scene of unusually high volatility for more than a week.

In Europe,stock markets also closed higher as investors assessed the impact of a short-selling ban on financial shares in four eurozone countries. Later in the day, the Italian government approveda new program of austerity cuts.

London's FTSE 100 was up three per cent at 5,320 points, while Germany's DAX was 3.5 per cent higher at 5,998. The CAC-40 in France was four per cent higher at 3,214.

European regulators impose short-selling bans

The gains in Europe came after regulators in France, Italy, Spain and Belgium imposed temporary bans on the short-selling of financial shares late Thursday, after days of wild volatility in bank shares that regulators said was due in large part to rumours that French banks were in financial difficulty.

However, analysts had serious doubts aboutwhether the short-selling ban would really calm the marketssince many experts saya similar move in 2008 actually madeinvestors more skittish.

"With deteriorating investor confidence in eurozone debt likely to continue driving reduced investor confidence in European banks' ability to withstand the fallout from the eurozone debt crisis; we doubt that downward pressure on European financials will now dissipate," said Lee Hardman, an analyst at Bank of Tokyo-Mitsubishi UFJ.

The gains in Europe came despite figures showing France's economy unexpectedly ground to a halt in the second quarter as consumers dramatically scaled back on spendingandthe country's exporters struggled.

Thestalling of the French economy was likely to worsen concerns over the euro zone in general, where the three bailout countries of Greece, Ireland and Portugal are in recession and Italy and Spain struggle with lacklustre growth.

France is already facing speculation that it may soon lose its triple-A credit rating due to its high debt load.