US stocks staged a late recovery on Wall Street, despite the release of worse-than-expected US growth figures earlier on Wednesday.

Wednesday markets

US Dow Jones up 56.56 at 8,736.59 US Nasdaq down 15.92 at 1,328.27 UK's FTSE up 65.3 at 4,246.2 Germany's Dax down 178.8 at 3,700.14 France's Cac up 35.53 at 3,415.38 Japan's Nikkei down 125.78 at 9,877.94

The data showed that the US economy grew at an annual rate of just 1.1% during the April to June period.

The news sent US stocks lower when trading began but a late rally saw the Dow Jones index close 0.6%, although the tech-based Nasdaq index ended 1.2% lower.

Analysts said that the Dow's rebound was an encouraging sign.

"The tone of the market is improving," said Stephen Massocca, president of Pacific Growth Equities.

"The economy has slowed down, but I think people know we're not going back into recession."

London and Paris hold firm

European shares rose in morning trade, only to see most of their gains wiped out after the release of the US GDP figures.

But in London, the FTSE 100 index recovered in afternoon trade to finish 1.5% higher.

"We've had a good string of corporate results this morning from Unilever, BSkyB and Friends Provident, so the things you'd like to be supportive have been helpful," said Andrew Bell, an equity strategist at Carr Sheppards Crosthwaite.

Shares in Unilever closed nearly 9% higher after the company upgraded its earnings forecast for the year.

Shares in Paris also closed in positive territory, with the Cac up 1%.

But in Frankfurt, investors were unnerved by the weak GDP figures and the Dax index closed down 4.6%.

Caution in Asia

Earlier, Japan's Nikkei index of leading shares closed down 1.26% while Hong Kong's Hang Seng index remained fairly flat.

Shares in carmakers, such as Nissan and Toyota, which had seen gains earlier in the week, were pushed lower.

"People are adopting a wait-and-see attitude," said Kenny Tang, associate director at Tung Tai Securities.