European stocks closed higher Friday as bank shares fared well ahead of the release of stress-test results for the industry and investors reacting to another deluge of quarterly results.

The Stoxx Europe 600 SXXP, +0.71% rose 0.7% to finish at 341.89, sending it up 3.6% for the month. That marks the best monthly advance since October last year.

U.S. stocks ended the month on a high note, with the S&P 500 closing just a few points off a record level. All three main indexes posted solid monthly gains. For the benchmark S&P 500 and Dow industrials this was the fifth consecutive monthly advance. For the Nasdaq Composite, the monthly gain was the largest since March. The S&P 500 index SPX, +0.16% hit an intraday record level at 2,177.13, but closed off the highs. The index rose 3.54 points, or 0.2% to 2,173.60, finishing the week flat. Over the month, the index of large-cap stocks gained 3.6%. The Dow Jones Industrial Average DJIA, -0.13% slipped 24.11 points, 0.1% to 18,432.24 and posted a 0.8% loss over the week. Over the month, the blue-chip index gained 2.8%. Meanwhile, the Nasdaq Composite Index COMP, +0.14% ended the session up 7.15 points, or 0.1%, at 5,162.13, posting a 1.2% gain over the week and a 6.6% gain over the month.

Asian shares hit a one-year high on Monday after disappointing U.S. economic growth data reduced expectations that the U.S. Federal Reserve will raise interest rates in the next few months.

U.S. gross domestic product increased at a 1.2 percent annual rate in the April-June period, less than a half of a 2.6 percent growth rate economists had expected.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.1 percent, hitting its highest level in about a year.

Asian markets showed limited reaction to a better-than-expected private survey on China's factory sector.

The Caixin/Markit Manufacturing Purchasing Managers' index (PMI) rose to a 1 1/2-year high of 50.6, beating market expectations of 48.7 and up from 48.6 in June.

An official survey showed factory activity eased in July.

Japan's Nikkei .N225 was flat, having erased early losses of 1.5 percent triggered by the yen's jump after the Bank of Japan's stimulus plans left investors underwhelmed.