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Optimism over upcoming U.S. jobs figures helped stocks and the euro to rally on Friday despite further evidence that the 17-nation eurozone is heading for recession.

Following a run of fairly strong U.S. economic data, investors are increasingly confident that the world’s largest economy is over a soft patch from last summer, helping to offset the global economic impact wrought by Europe’s ongoing debt crisis.

Figures released Friday provided further evidence that the eurozone is heading for a recession. Eurostat, the EU’s statistics office, said retail sales dropped 0.4 percent during the month, in contrast to expectations for an increase of the same amount.

The December data reinforced expectations that the eurozone contracted during the fourth quarter of the year. Eurostat is due to publish its first estimate for the quarter on Feb. 15.

The highlight of the day in the markets will be the monthly U.S. nonfarm payrolls data. Expectations are that the U.S. economy generated around 150,000 jobs during January. Though that is unspectacular for an economy recovering from its worst recession since World War II, the amount of jobs being created is up from levels seen just a few months ago.

“Volatility is likely to remain low until these figures are out, with traders opting to sit and await news rather than heavily commit themselves,” said David Jones, chief market strategist at IG Index.

In Europe, the FTSE 100 index of leading British shares was up 0.5 percent at 5,823 while Germany’s DAX rose 0.4 percent to 6,682. The CAC-40 in France was 0.5 percent higher at 3,394.

Wall Street was also poised for a solid opening, though how it actually performs will hinge on the payrolls data, which are released an hour before the bell free credit score. Dow futures and the S&P 500 futures were both up 0.2 percent.

The euro was also garnering support alongside stocks _ when appetite for risk is elevated, the euro often finds favour. It was trading 0.3 percent higher at $1.3177 despite the retail sales disappointment.

The focus on the U.S. has proved a welcome diversion for some traders from monitoring the daily grind of Europe’s debt crisis, where much hinges on whether Greece can secure a deal with its private creditors, as is anticipated. A deal is expected soon, though that has been the official line for a few weeks.

Earlier in Asia, the picture was mixed.

Japan’s Nikkei 225 index fell 0.5 percent to close at 8,831.93 but Hong Kong’s Hang Seng ended marginally higher at 20,756.98.

Mainland Chinese shares extended gains fueled by news of fresh support for the farming and small-business sectors, with the benchmark Shanghai Composite Index rising 0.8 percent to 2,330.41 while the Shenzhen Composite Index added 1.5 percent to 878.29.

Oil markets were also relatively subdued. Benchmark oil for March delivery was up 40 cents to $96.76 per barrel in electronic trading on the New York Mercantile Exchange.

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Pamela Sampson in Bangkok contributed to this report.

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Regions Financial is days away from announcing a sale of its Morgan Keegan unit, according to a Wall Street Journal report. And it seems St. Louis-based Stifel Financial may not be out of the bidding.

The news follows a more than six-month-long effort by Birmingham-based Regions to sell Morgan Keegan, a Memphis based brokerage with 1,200 financial advisers nationwide.

Citing anonymous sources, Bloomberg News said last week that Regions had ended the talks with Stifel.

However, the Wall Street Journal also is reporting online today that Stifel remains in the hunt to buy Morgan Keegan and is bidding against Raymond James, a St. Petersburg-based brokerage with 5,400 financial advisers. Stifel has about 2,000 financial advisers.

The Wall Street Journal’s report says the sale price for Morgan Keegan will range between $900 million and $1 billion, which is less than what Regions sought for the unit when it placed it up for sale last June Payday advance. Regions bought Morgan Keegan in 2001 for $789 million.

Regions owes the U.S. Treasury $3.5 billion from participating in the Troubled Asset Relief Program, or TARP, in 2008, and is seeking to use the proceeds from the Morgan Keegan sale to pay a portion of the TARP money it owes.

A Regions spokesman did not immediately respond to a request for comment about the status of the Morgan Keegan sale.

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A U.S. trade envoy has accused China’s government of increasing its role in the economy in violation of its free-trade pledges and he appealed to Beijing to reconsider its embrace of “state capitalism.”

The comments reflect a harder U.S. tone toward Beijing amid disputes over market access for banking and other services and complaints China is supporting its producers of solar power and other technology despite promising to allow free competition.

In a speech this week, the U.S. ambassador to the World Trade Organization cited a “troubling trend” of increased Chinese government intervention in the economy over the past five years despite its WTO commitments to open its markets.

The ambassador, Michael Punke, made the comments Wednesday in Geneva, according to a transcript on the website of the U.S. Trade Representative’s office. He was speaking at a WTO meeting for the tenth and final annual review of China’s compliance with its WTO obligations since it joined the body in 2001.

“China seems to be embracing state capitalism more strongly each year, rather than continuing to move toward the economic reform goals that originally drove its pursuit of WTO membership,” he said. “This is a troubling development, and the United States urges the Chinese government to reconsider the path it is on.”

During a trip through Asia last month, President Barack Obama called on Beijing to show more maturity in its economic relations with other nations.

“Increasingly, trade frictions with China can be traced to China’s pursuit of industrial policies that rely on trade-distorting government actions to promote or protect China’s state-owned enterprises and domestic industries,” Punke said.

China’s trade and economy have grown rapidly since 2001, propelling it past Japan as the world’s second-largest economy behind the United States and financing a military buildup that has alarmed its neighbors.

On Wednesday, China’s Defense Ministry criticized Washington’s strengthened military pact with Australia as a throwback to “Cold War thinking.”

Beijing has alarmed foreign companies by unveiling initiatives to build up state-owned corporate champions in an array of fields from telecommunications to wind energy.

Business groups complain Beijing appears to be trying to squeeze foreign companies out of its clean energy and other promising industries. They have questioned whether the communist government wants to live up to pledges to allow foreign companies to compete on an equal footing with Chinese rivals.

Punke said that in its first five years of WTO membership, Beijing took “impressive steps” to reduce tariffs, eliminate trade barriers and improve protection for intellectual property rights.

But he noted complaints that Beijing tries to intimidate foreign companies, threatening to retaliate if they speak up about problematic policies or cooperate with their governments in challenging them.

Punke complained that Beijing appears to resort to trade actions in response to legitimate steps by the United States and other trading partners under their trade laws.

Last month, China launched a probe of U.S. government support for its solar, wind and other renewable energy industries after American authorities agreed to investigate a complaint by a group of companies that Beijing improperly subsidizes exports of solar panels and hurts foreign competitors.

“This type of conduct is at odds with fundamental principles of the WTO’s rules-based system,” Punke said.

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Pope Benedict XVI has had his first meeting with Italy’s new leader on the tarmac of Rome’s airport just before taking off for a trip to Africa.

Premier Mario Monti greeted the pope Friday morning as Benedict descended from the helicopter that brought him from the Vatican to Rome’s Leonardo da Vinci airport. They chatted as they walked slowly across the tarmac to the pope’s waiting plane.

Monti later Friday faces the second of two confidence votes for his government in parliament cash advance flexible payments. The Senate on Thursday easily approved his government, formed of bankers, professors and CEOS aimed at saving Italy from its debt crisis.

Benedict then took off for the west African nation of Benin for a three-day visit where he will speak of the role of the church in Africa.

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Thailand’s prime minister says the country’s catastrophic floods may take up to six weeks to recede.

Yingluck Shinawatra also said in a weekly address to the nation Saturday that the crisis had displaced more than 110,000 people from their homes.

The government said the death toll had risen to 356.

Excessive monsoon rains have drowned a third of the Southeast Asian nation since late July, and over the last two weeks the government has struggled to prevent the inundation from pouring through Bangkok.

Districts just outside the capital’s northern boundaries have been submerged for days. Since Friday, rising waters have caused minor flooding in Bangkok’s outskirts.

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Fiat and Chrysler are focusing on cash-generating businesses in the United States and Brazil to help weather growing uncertainty in the European auto market, CEO Sergio Marchionne said Wednesday.

Fiat, which took over Chrysler nearly 2 1/2 years ago, saw its credit rating downgraded this week over financial risks in its alliance with the U.S. carmaker, which has been recovering from bankruptcy. Crucially, it is under severe pressure in its home market of Italy, where unions are resisting more flexible work conditions and demand is fading.

Adding to uncertainty, the Italian government appears unable to swiftly implement the austerity and growth measures aimed at preventing the country _ Fiat’s most important market _ from being swept into a spiraling debt market crisis.

“There is no doubt that a lot of elements are coming to play here, one of which may be an Italian factor. … I don’t know any more,” Marchionne said. “The stock market is up 4, 5 percent one day, then down 3. It is totally moving on rumors. There is no factual basis. I haven’t moved a forecast. I have moved nothing.”

Marchionne has maintained 2011 forecasts of euro58 billion ($79 billion) in revenues with euro2.1 billion ($2.9 billion) in trading profit for the combined automakers.

But he said there was little he can do to calm the markets.

“It is embedding a perception of risk which is totally outside of my control for me to try to cover it. We are almost helpless on this. There is nothing I can tell you, or tell the market, that will make this go away.”

The continuing economic uncertainty is hurting auto sales, particularly in Fiat’s main Italian market. Fiat registered a 7.8 percent drop in sales last month compared with a year earlier while its European market share shrank to 6.5 percent in September from 7.2 percent a year earlier.

“It impacts consumer attitudes, and that is probably the most negative thing about all of this. It really negatively impacts moods,” he said.

To maintain profitability, Marchionne said he is focusing on the cash-making parts of the business _ the U.S. and Brazilian markets _ while trying to build sales in the increasingly competitive European market, mainly outside of Italy where sales are at 30-year lows.

“They are still today the biggest profit contributors to Fiat. They need to be nurtured,” Marchionne said of the U.S. and Brazil business card. “That’s why I spend so much time there.”

Ironically, it is Fiat’s alliance with Chrysler that triggered downgrades by ratings agencies. Fitch was the last to weigh in on Tuesday, lowering the credit rating from to BB from BB+. It cited Fiat’s “intrinsic weakness,” its heavy reliance on the Italian and Brazilian markets, and exposure to increased financial risk due to the alliance with Chrysler.

Marchionne said Fiat is in a good cash position to continue with its investments in Italy and abroad for new production. Fiat expects to have euro18 billion in liquidity at the end of this year, according to its forecasts.

“We have enough liquidity now to deal with our requirements for quite a while,” Marchionne said.

But he criticized unions in Italy that continue to challenge the new contracts with more flexible work hours that Fiat has agreed at three plants. The FIOM metalworkers union has announced a one-day strike Friday at all Fiat plants.

“I think the strike, personally, is a very bad idea. It is not the manner in which one would encourage investment in this country,” Marchionne said, adding that he believes most Fiat workers support the new contracts, which have secured new investments at two plants near Fiat’s Turin headquarters and one near Naples.

Marchionne attended Wednesday the European launch of the Lancia Voyager minivan and Thema luxury sedan, both based on Chrysler models and concrete examples of the tighter integration of the two companies. In all of Europe except Britain, Chrysler models will carry the Lancia badge.

The Thema luxury sedan is Lancia’s re-entry into the premium market, after a two-year absence, at an affordable price of euro41,400. It is based on the Chrysler 300, but has been restyled and adapted for European markets with a soft leather interior, firmer suspension and redesigned front-end.

Lancia brand chief Saad Chehab said the car is the same size as the Audi A-8, but sells at a 15 percent discount over the smaller Audi A-6.

Both the Thema and Voyager will be manufactured in Canada, and aim at the higher end of Fiat’s market, with neither expected to achieve huge volumes. Chehab said they expect to sell 10,000 Themas and 11,000 Voyagers a year.

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Rakuten is not just the top shopping website in Japan. These days, the company is doing some serious shopping of its own as it turns the strong yen _ usually seen as a huge negative for Japanese companies _ into a plus.

The online shopping-mall operator has bought several overseas businesses in the last year and is not the only Japanese company on a shopping spree. Businesses from pharmaceutical companies to toy makers have been emboldened by the increased purchasing power that the rising yen gives them.

A strong yen has long been characterized as potentially fatal for Japan Inc. by making the country’s cars, consumer electronics and other goods more expensive abroad, eroding the earnings of giant exporters like Toyota Motor Corp., Sony Corp. and Nintendo Co.

But for a service company such as Rakuten Inc., the yen at post World War II highs is a boon it hopes will power its rise up the global e-commerce hierarchy, where it now trails American giants such as Amazon and eBay. The yen is up nearly 8 percent against the U.S. dollar over the past year.

“I like it,” Rakuten Chief Executive Hiroshi Mikitani said with a grin when asked about the yen’s gains. “We can buy more companies.”

Mikitani also thinks Japan’s traditional export-focused manufacturers should be taking advantage of the yen’s rise by buying rivals in emerging markets. But he said some may be reticent as they lack the management expertise to know what to buy or how to make it work.

“They should think about that, and utilize the strength of the currency as a weapon,” Mikitani told reporters. “I think we should favor the stronger yen.”

Embracing a strong yen is an uncommon attitude among Japanese CEOs, and officials. Rakuten is different in other ways too. Nearly three quarters of the hires joining the company this month were foreigners and Mikitani’s pep talk at a welcoming ceremony this week was in English, the standard language at Rakuten _ both rarities for usually insular Japanese companies.

The jump in overseas acquisitions by Japanese companies this year has come even though the global economy faces extremely uncertain times and Japan’s own economy has reeled from the March 11 earthquake and tsunami disasters.

Data compiled by Tokyo-based Recof Corp., which advises on acquisitions, found overseas mergers and acquisitions by Japanese companies gained by 30 percent in number of deals in the first eight months of this year.

The jump was most pronounced in Asia, where the number of deals increased 50 percent year-on-year to 143, a record for the region, although the purchase prices were bigger for deals in the U.S., according to Recof.

Data from Dealogic shows that the value of overseas takeovers and acquisitions by Japanese companies in January through August more than doubled from a year earlier to $46.7 billion.

Among the biggest Japanese takeovers announced in recent months was Takeda Pharmaceutical Co.’s deal to buy Switzerland’s Nycomed for $13.6 billion, giving Japan’s biggest drugmaker coveted access to emerging markets.

Another was Tomy Corp.’s purchase of RC2, the U.S. maker of Chuggington and Thomas & Friends toys in an all-cash deal valued at about $640 million.

Online securities company Monex Group Inc. bought TradeStation Group, based in Florida, in a deal valued at up to $411 million earlier this year. Brewers such as Kirin and Asahi have also been busy acquirers.

The yen’s gains can also tip the scales in favor of manufacturing investments overseas.

Last month, Honda Motor Co. announced a $50 million investment to boost transmission production in the U my credit score.S., bringing the automaker’s capital investment in Ohio to more than $400 million for this year.

Matt McCollister, vice president in charge of economic development with nonprofit Columbus2020, who visited Japan recently to woo more investments to Ohio, said the strong yen came up often in meetings with executives as a solid incentive.

“I don’t know that it’s the primary catalyst, but it can definitely be a tipping point for a project, especially if there’s one that has been under consideration,” he said. “When you start to apply the currency differential, it may make more financial sense than it did a year ago.”

Still, there is no doubt that the yen’s unrelenting strength is the source of plenty of woe for many of the Japanese corporations that are global household names. It has also added to worries in Japan that more manufacturing could be shifted overseas, hollowing out industry and jobs.

Like other Japanese automakers, Honda has been hit hard. It says the yen erased 22.5 billion yen ($288 million) from its April-June operating profit. The Tokyo-based maker of the Odyssey minivan and Accord sedan, had initially counted on the dollar trading at 80 yen this fiscal year through March 2012. The dollar is now hovering between 76 yen to 77 yen.

The automaker has been moving production to the markets where vehicles are sold. For the more specialized cars still being exported from Japan, pressure is on to cut costs to make the business worthwhile, sometimes delaying model launches until such cuts are achieved, Honda officials say.

Squeezing positives out of a strong yen is a change of pace for Japan which has been, up to now, obsessed with trying to prop up the dollar to protect exporting giants.

Such efforts have proved largely futile in recent years against larger global developments that nowadays include the financial crisis in Europe, including worries about Greek defaulting on its debts, and fears of a looming recession in the U.S.

Japan’s finance ministry mostly recently tried to weaken the yen in August by buying dollars. That did send the yen lower but the effect lasted only days.

For Rakuten, a robust yen is key to its ambitions to one day become the world’s No. 1 e-commerce company.

In September, Rakuten announced an agreement to buy British e-commerce site Play.com for 25 million pounds (3.3 billion yen, $43 million), following the acquisition of PriceMinister of France and German online shopping mall Tradoria.

The moves add to an empire that now sprawls across 10 countries, including Japan, raking in 90.7 billion yen ($1.2 billion) in April-June sales, a quarterly record for Rakuten. Its business also includes Buy.com of the U.S. and a partnership with Baidu Inc. in China, as well as ventures in Thailand, Russia, Taiwan and Indonesia.

Kevin M. Carroll, who runs EA International, an environmental engineering and consultancy company in Tokyo, says the shrinking Japanese population and the high labor costs as well as corporate taxes in Japan are making overseas growth even more crucial for Japanese companies.

The days when a big Japanese corporation could prosper just by catering to customers in Japan are long over, said Carroll.

“The strength of the yen in most foreign markets works for Japanese companies as it places them in the envious position of acquiring foreign firms or technologies at a discount,” he said.

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The Obama administration has decided to upgrade Taiwan’s existing fleet of F-16 fighter jets but not sell it the new planes it also wants, congressional staff said.

The administration gave a briefing on Capitol Hill on its decision Friday, but has yet to issue a formal notification of the intended deal. An announcement is expected by the end of this month.

Two congressional aides confirmed the decision to The Associated Press on condition of anonymity as they were not authorized to make it public.

The decision represents a compromise aimed at improving Taiwan’s ability to defend itself, while assuaging China’s concern over the arms sales. However, Beijing is still expected to react angrily. It regards the self-governing island as part of its territory.

There will also be criticism from Republicans and some Democrats in Congress who have strongly backed the sales of 66 F-16 C/D fighters that Taiwan wants, in addition to the upgrades of the 145 F-16 A/Bs that the U.S. sold it in the 1990s.

There were no immediate details on the package of upgrades the U.S. is providing for the A/Bs. But even if it includes sophisticated radar, avionics and missile systems, Taiwan’s air force will still lag far behind its Chinese counterpart, which is equipped with state-of-the-art jet fighters.

A Pentagon report issued last year painted a grim picture of Taiwan’s air defense capabilities, saying many of the island’s 400 combat aircraft would not be available to help withstand an attack from the mainland.

Wang Kao-cheng, a military expert at Taipei’s Tamkang University, said Taiwan’s air defenses could get some lift from the upgrade, but the island is still at a profound disadvantage with Beijing in the number of third-generation warplanes it has at its disposal.

“Taiwan has fallen behind in air superiority as of now, not to mention the fact that China is developing the fourth-generation stealth fighters, which could be very powerful,” Wang said. “The upgrade program will not fill the vacuum left over by the absence of the C/Ds.”

On Friday, Republican Sen. John Cornyn of Texas, where the Lockheed Martin plant that would build the F-16s is located, said the decision would be a slap in the face to strong ally Taiwan.

Howard Berman, the ranking Democrat on the House of Representatives Foreign Affairs Committee, called it a “half-measure.” He said Taiwan needed more advanced fighter aircraft to defend itself against increasing Chinese military threat.

China and Taiwan split amid civil war in 1949. While Taiwan’s relations with the mainland have greatly improved in the past three years and tensions across the Taiwan Strait are their lowest in six decades, China’s military buildup has carried on apace.

The United States is legally obligated to sell weapons to Taiwan for its self-defense. The last major arms sale announced in early 2010 prompted China to cut military ties with the U.S. for several months.

Taiwan’s Defense Ministry said it had no immediate comment on the U.S. F-16 decision.

China’s Defense Ministry and Ministry of Foreign Affairs did not respond immediately to faxes asking for comment, and calls to the Taiwan Affairs Office rang unanswered Monday.

The official China Daily newspaper had a front-page article Monday warning that an arms sale would “spark strong reaction.”

It quoted Tao Wenzhao, a senior researcher at Tsinghua University in Beijing, as saying “the (arms sale) hurts China’s core interests. And to keep on doing the wrong thing for 30 years just doesn’t make it right.”

China temporarily suspended military exchanges with the U.S. last year after the Obama administration notified Congress it was making $6.4 billion in weapons available to Taiwan, including missiles, Black Hawk helicopters, information distribution systems and two Osprey Class Mine Hunting Ships.

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As many as 9 million Americans have their identities stolen each year, according to the Federal Trade Commission. Here are tips from the FTC, National Consumers League and Gibson Research on avoiding identity theft:

Police say rioters fired gunshots at unarmed officers and a police helicopter during this month’s disturbances in the English city of Birmingham.

West Midlands Police released footage Saturday showing masked men firing shots during riots on Aug. 9.

The force said 11 shots were fired. Chief Constable Chris Sims called it “a concerted and organized attempt to kill or injure police officers.”

Police also said they had arrested an eighth suspect over the deaths of three men run down by a car in Birmingham as they protected shops from looters fast cash loans.

Four people have already been charged with murdering Shazad Ali, Abdul Musavir and Haroon Jahan.

More than 1,300 people have been charged over the riots that flared in London and other English cities for four nights.

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