PARIS, Sept 24 (Reuters) - European stocks reversed losses and staged a late rally on Friday, sparked by better-than-feared U.S. economic data that helped the market snap a three-day losing run and eke out a gain on the week.
Spain's tougher-than-expected 2011 budget also helped lift the mood, reassuring investors on the country's ability to deal with its debt.
The FTSEurofirst 300 index of top European shares unofficially closed 1.1 percent higher at 1,078.05 points, gaining 0.5 percent on the week.
U.S. data showed on Friday new orders for long-lasting U.S. manufactured goods excluding transportation gained ground last month while business spending rebounded and the supply of houses on the market tumbled to the lowest level in 42 years, pointing to an improvement in the economy after a recent soft patch.
"The headline figure for the durable goods data is soft, but looking at the details, a lot of sectors show resilience, which is a good sign," said Jean-Marc Lucas, economist at BNP Paribas in Paris.
Recently-hammered banks were among the top gainers, with Credit Agricole up 5.1 percent, Swedbank up 2.9 percent and Banco Santander up 2.8 percent. (Reporting by Blaise Robinson)