European stocks advanced on Friday, while the S&P 500 and Nasdaq rose in line with gains in U.S. Treasury yields, as investors were encouraged by upbeat bank earnings and positive U.S. economic data.

Investors largely shrugged off the biggest fall in Chinese exports since 2009 to focus on U.S. data that overall suggested stronger growth. Market participants largely resumed buying across equity markets based on higher growth expectations that had tailed off this week, with bank shares leading the way.

Top U.S. bank executives, in their first public comments about quarterly earnings, expressed optimism about the outlook this year as leading financial institutions recorded profits for the fourth quarter.

Bank of America Merrill Lynch (BAC.N), for instance, reported a 47 per cent rise in fourth-quarter profit, while JP Morgan Chase (JPM.N) also reported strong earnings, with a 24-per-cent rise in profit.

U.S. economic data have also boosted the market, as retail sales rose in December given strong demand for automobiles and furniture. Producer prices expanded as well.

"I think this reflects optimism about an uncertain future," said Juan Perez, foreign exchange trader at Tempus Consulting in Washington.

"Trump ... is coming in with a Republican administration which is historically pro-business," he added. "They're going to deregulate, they're going to open markets, they're also going to expand economic growth by investing in infrastructure."

In afternoon trading, the Dow Jones Industrial Average was down 0.1 per cent at 19,869.62, while the S&P 500 gained 0.1 per cent to 2,273.18. The Nasdaq Composite, on the other hand, added 28.13 points, or 0.5 per cent to 5,575.85.

The dollar, meanwhile, was down 0.1 per cent against a basket of major currencies at 101.25, but was off a five-week low hit earlier this week. The greenback was down 0.2 per cent at 114.51 yen.

The dollar index, though, was still headed for its worst weekly performance in more than two months.

"Markets, overall, have stabilized following the post-Trump press conference shake-up," said Action Economics in its latest blog. "Some consolidation is expected now [in dollar/yen], though should data continue to strengthen, keeping Fedspeak leaning to the hawkish side. Dollar/yen upside can be expected to resume."

The so-called 'reflation trade' that had sent the dollar to a 14-year high last month was based on Trump's campaign promises of increased fiscal spending, lower taxes, and deregulation, all of which are inflationary and would likely drive the Federal Reserve to raise interest rates faster than its normal pace.

U.S. Treasury yields rose across the board, bolstered by Friday's better-than-expected data, led by U.S. retail sales, producer prices, as well as the big rise in U.S. inflation expectations as shown in the University of Michigan consumer sentiment report.

Benchmark U.S. 10-year yields fell 10/32 in price, yielding 2.398 per cent, up from Thursday's 2.361 per cent. German 10-year bond yields were also higher, up at 0.264 per cent, from 0.234 per cent late on Thursday.

Europe's broad FTSEurofirst 300 index closed up one per cent to 1,447.22.

Germany's DAX was up 0.94 per cent and Britain's FTSE 100 rose 0.6 per cent, its 14th consecutive daily gain.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.15 per cent after rising to its highest since late October the previous session. It was up 1.8 per cent for the week.

Japan's Nikkei stock index finished up 0.8 per cent, though it still ended the week down 0.9 per cent.

In commodity markets, Brent crude was down 0.93 per cent, at US$55.49 a barrel, while U.S. crude fell 1.1 per cent, at US$52.43 per barrel.

Spot gold was up slightly at US$1,196.40 an ounce, having risen overnight to a seven-week high above US$1,200.