NEW YORK?US stocks closed higher on Wednesday as renewed confidence in the European economy outweighed a new report saying the US economy was slowing down.

The Dow Jones Industrial Average gained 46.32 points (0.45 percent) to 10,387.01 in closing trades, while the broader S&P 500 index gained 7.03 points (0.64 percent) to 1,098.87 points.

The tech-rich Nasdaq composite index was up 19.98 points (0.90 percent) to 2,228.87.

Trade opened with strong gains after news that the Portuguese government successfully issued debt bonds eased concerns over the euro-zone economy which were sparked on Tuesday over a report on the European banking system.

The reassuring news from Europe was later slightly dampened with the release of the Federal Reserve's beige book report that said the US economy is showing "widespread" signs of deceleration.

The central bank reported "continued growth in national economic activity" between mid-July and the end of August, "but with widespread signs of a deceleration."

Painting a dour picture of the economy, as expected, the Fed said the recovery continued to be uneven across the country and across sectors.

"The economy is slowing but quite a significant degree of the slowing has already been anticipated by the market," said Zach Pandl, analyst at Nomura Global Economics.

"Unless the slowing becomes quite disorderly or abrupt the market should maintain the current levels... The beige (book) was not news as much as it was confirmation of what we already knew."

The Fed report included some good news from the manufacturing sector and the slightest of signs that Americans might be returning to the shops.

Among the stocks in focus, BP shares were up 3.17 percent higher after it said in its much-anticipated report on the Gulf of Mexico oil spill that it was caused by human and technical failures by BP and other sides.

Computer giant Hewlett-Packard saw its stocks drop 2.78 percent after it had filed suit against former CEO Mark Hurd after he was named a co-president at US business software giant Oracle.

The bond market was slightly lower.

The yield on the 10-year US Treasury bond jumped to 2.654 percent from 2.609 percent on Tuesday while that on the 30-year bond was up to 3.723 percent from 3.669 percent. Bond yield and prices move in opposite directions.