European stocks erased earlier losses and the Standard and Poor's 500 Index climbed as results from Google and Citigroup helped allay concern stress tests will show banks don't have enough capital.

The Stoxx Europe 600 Index lost 0.1 per cent at 9.46am in New York, after declines of as much as 0.8 per cent. The S&P 500 added 0.4 per cent.

In Dublin, the Iseq was 16 points, or 0.6 per cent, lower at 2874.14

The Markit iTraxx SovX Western Europe Index of credit-default swaps on 15 governments jumped as much as 10 basis points to an all-time high of 292.

Greek two-year bonds tumbled, driving the yield to a record 34 percent, and the 10- year German bond yield fell two basis points. Irish 10-year bond yields rose to 14.019 per cent, after opening at 13.9 per cent

The European Banking Authority will publish the results today of stress tests on 91 lenders, detailing their holdings in debt-ridden nations such as Greece and Italy.

"We got some good earnings news on individual companies," Jeffrey Coons, president of Manning and Napier Advisors in New York, said in a telephone interview. His firm manages $44 billion.
"There's a lot more company-specific issues driving stocks now, even though there's still macro uncertainty about the debt negotiations in Washington and the European crisis."

The Stoxx 600 has fallen 2.1 per cent this week. Temenos Group AG plunged 20 per cent in Zurich
after the banking-software provider cut its license-revenue forecast. SGS AG, the world's largest goods-inspection company, sank 7 per cent as results missed analysts' estimates.

The S&P 500 is trimming its biggest weekly decline in 11 months, after falling 2.6 per cent through yesterday.

Google, owner of the Internet's most popular search engine, rallied 12 per cent after saying quarterly sales were $6.92 billion, 5.3 per cent above analyst estimates.

Citigroup, the third biggest US bank, climbed 2.3 per cent after profit rose 25 per cent, beating forecasts.

Bloomberg