Stocks, oil rise on data, ECB cash injection

US and European stocks rose on Thursday, lifted by more encouraging US economic data and a massive injection of cash by the European Central Bank (ECB), while crude oil rose on the demand outlook and potential supply disruptions related to Iran.

US stocks opened higher despite news that Americans filed fewer new claims for jobless benefits last week. But consumer spending was flat in January for the third straight month after accounting for inflation, clouding the economic outlook.

European stocks rose almost one per cent, led by bank shares benefiting from the ECB's latest liquidity boost. A dip in Spanish borrowing costs fuelled hopes the worst of the euro zone crisis is over.

But gains were limited as key benchmark indices in Europe and on Wall Street failed to convincingly break above major resistance levels as a brisk 2-1/2 month rally loses steam.

The Dow Jones industrial average was up 32.2 points, or 0.25 per cent, at 12,984.27. The Standard & Poor's 500 Index was up 4.11 points, or 0.3 per cent, at 1,369.79. The Nasdaq Composite Index was up 10.96 points, or 0.37 per cent, at 2,977.88.

The FTSEurofirst 300 Index of top European shares rose almost one percent to 1,085.49 points.

The euro fell to a one-week low against the dollar on rising risk aversion after the US government said spending rose 0.2 per cent in January, just below analysts expectations.

The euro had already been weak before New York opened after the ECB's huge cash injection reminded investors of the region's debt overhang and the fragile euro zone economy.

The US data only cemented the euro's losses.

The euro was down 0.1 per cent at $1.3311, while the US dollar index was up 0.09 per cent at 78.81.

The benchmark 10-year US Treasury note was down 20/32 in price to yield 2.04 per cent. US light sweet crude oil rose 64 cents to $107.71 a barrel.