Europe stocks close higher, US stocks advance

European stock markets closed markedly higher on Wednesday, with London's benchmark FTSE 100 index adding 1.41 percent to 5,523.92 points. In Frankfurt, the DAX 30 was 1.50 percent stronger at 6,228.99 points and in Paris the CAC 40 rose by 1.67 percent to 3,063.12 points. US stocks also gained in intraday trading on the eve of an EU summit which markets hoped would deliver firm action to contain the eurozone debt crisis amid debt tensions over Spain. German Chancellor Angela Merkel insisted in a speech to lawmakers on Wednesday that there were "no quick, no easy" solutions to Europe's debt crisis. A day before EU leaders gather in Brussels amid expectations they can come up with solutions to the crisis, Merkel warned there was no "magic formula" and called for the problem to be tackled at its roots. In foreign exchange deals, the euro eased to $1.2473 from $1.2495 late on Tuesday in New York. "The foreign exchange market appears directionless at present and the moves in euro-dollar in recent days have been modest," said Derek Halpenny, European head of global markets research at the The Bank of Tokyo-Mitsubishi UFJ. "In part this is due to the fact that risk aversion, so prevalent in May, has subsided somewhat in June due firstly to the Greek election result which eased fears over imminent Greek (eurozone) exit and due also to the hope being placed in EU leaders that measures will be taken to resolve the crisis. "Equity markets are modestly higher... as this hope persists," he added. In early New York trading, the Dow Jones Industrial Average was up by 0.33 percent at 12,576.37 points, while the S&P 500 index advanced by 0.48 percent to 1,326.34 and the tech-rich Nasdaq rose by 0.46 percent to 2,867.10. EU leaders were to meet in Brussels for two days of talks from Thursday to consider proposals to give EU authorities more power over national budgets, and to centralise banking supervision. But many economists were unconvinced that they would be able to overcome their differences to hammer out a coherent deal. In company news meanwhile, a huge planned merger between commodities giants Glencore and Xstrata was thrown into doubt Wednesday after the sovereign wealth fund of Qatar, Xstrata's second-largest shareholder, opposed the deal's terms. Qatar Holdings (QH) said in a statement to the London Stock Exchange that "whilst it sees merit in a combination of the two companies, it is seeking improved merger terms." Both Switzerland-based Glencore and Xstrata are listed in London. Glencore and Xstrata formalised in February a highly anticipated deal to create a raw materials juggernaut with a market capitalisation of $90 billion (72 billion euros). Glencore is offering 2.8 of its shares per Xstrata share. But QH has now said that "an exchange ratio of 3.25 new Glencore shares for every one existing Xstrata share would provide a more appropriate distribution of benefits of the merger whilst properly recognising the intrinsic stand-alone value of Xstrata." Glencore shares were down 2.25 percent at 295.90 pence and Xstrata gained 0.11 percent to 787.0 pence in London deals.