European stocks closed at their highest in one month and Wall Street jumped more than 1 percent as the US data encouraged investors to extend a Greece-inspired rally for a fifth day.

Prices of US government debt fell after the US manufacturing data, which raised hopes the world’s largest economy may be recovering from a recent slowdown.

“The economy has passed the tipping point risk and growth looks poised to resume a 3-percent-plus rate of gross domestic product growth in the second half of the year,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.

Major US stock indexes were poised to record their best week in nearly a year.

The Dow Jones industrial average jumped 160.26 points, or 1.29 percent, at 12,574.60. The Standard & Poor’s 500 Index was up 17.46 points, or 1.32 percent, at 1,338.10. The Nasdaq Composite Index was up 40.15 points, or 1.45 percent, at 2,813.67.

In Europe, the FTSEurofirst 300 index of top shares closed 0.76 percent higher.

Prices of benchmark 10-year US Treasury notes fell 12/32, driving yields up to 3.2047 percent, after the US manufacturing report.

Gold prices fell as low as $1,481.70 an ounce, their weakest since May 17, as investors were relieved by the approval of Greece’s austerity package on Thursday, which eased fears of an imminent default by the Greek government.

In another sign of improved risk appetite, a key index of US subprime mortgage bond prices jumped on Friday. The rise in the benchmark ABX index was triggered by the positive developments in the Greek sovereign debt crisis and by the suspension of the New York Fed’s Maiden Lane II auctions, Thomson Reuters’ IFR said.

The Maiden Lane II portfolio was created during the depths of the financial crisis to absorb the risky “private-label” mortgage securities from AIG, and help prevent the collapse of what was then the world’s largest insurer.

Still, investors remained concerned about the prospects for the global economic recovery as manufacturing data from other parts of the world were more sobering.

In Asia and Europe, purchasing managers’ indexes slid to multi-month lows in June as factories fought weaker consumer demand overseas and tightening monetary conditions at home.

US crude oil prices fell 0.28 percent to $95.15 a barrel after a report showed the Chinese factory sector grew at its slowest pace in 28 months. China is the world’s largest consumer of raw materials.

“There is no doubt that the growth rate is slowing,” said Peter Dixon, an economist at Commerzbank in London.

“There is nothing in the offing suggesting a rebound — we are in for a few months of slower growth,” he said.

The US dollar rallied broadly after the ISM report but subsequently erased part of its gains. It was up 0.12 percent against a basket of major currencies, according to the US dollar index.

The euro last traded at $1.4501, down 0.02 percent on the day. For the week, however, the single currency is expected to post its best performance against the dollar since January.