European shares rallied to a week high on Friday afternoon, led by economy-sensitive technology stocks as a better-than-expected report on U.S. factories raised expectations for solid U.S. jobs data next week. Growth at U.S. factories decelerated slightly in September as growth in new orders slowed, but the employment index rose to 58.1 from 55.7. "The ISM data was bang in line with expectations, but what stands out is the gain in the employment index," said Holger Schmieding, a senior economist at Bank of America in London. "This bodes pretty well for the next employment report. Despite market worries that high oil prices could slow down the U.S. economy significantly, we still see strong growth." By 1440 GMT, the FTSEurofirst 300 index of pan-European blue chips was 1.5 percent stronger at 1,002 points. The narrower DJ Euro Stoxx 50 index surged 2 percent to 2,781.3 points. Gains on Wall Street lent further support to equity markets this side of the Atlantic. The Dow Jones industrial average was up 0.9 percent to 10,172 by 1443 GMT, while the technology-laced Nasdaq Composite Index was up 1.5 percent at 1,925. German software maker SAP AG led the way higher, gaining 3.8 percent amid fresh takeover talks after U.S. rival Peoplesoft ousted its chief executive in a move that might pave the way for Peoplesoft's takeover by Oracle. --More 1818 Local Time 1518 GMT
