* FTSEurofirst up 0.7 percent
* Sandvik, Atlas Copco up after results
* U.S. GDP growth boosts stimulus hopes
* Spain's economic crisis limits gains
By David Brett
LONDON, April 27 (Reuters) - Europe's top share index rose on Friday as bumper corporate results from the likes of Sandvik helped offset fresh macroeconomic gloom after U.S. growth data missed forecasts and Spain was hit by a two-notch ratings downgrade.
The FTSEurofirst closed up 7.19 points, or 0.7 percent, at 1,051.50, despite the backdrop of euro zone debt problems, which remain a huge pothole on the road to recovery.
Spain was again the main focus of early trade after Standard & Poor's cut its rating on indebted periphery by two notches late on Thursday. On Friday a minister said that Spain's sickly economy faces a "crisis of huge proportions".
In spite of that, markets bounced with Spain's IBEX up 1.7 percent, but down 15 percent on the month.
"You can argue a lot of it is short covering but people are already so negative on Spain and on the IBEX well in advance of this. If anything the delivery of the news is the trigger to the onside," Barclays' European equity strategist Ed Shing said.
Robust results elsewhere continued a decent start to quarterly earnings for European companies and helped counter a first-quarter slowdown in U.S. GDP.
Swedish engineering groups Sandvik and Atlas Copco reported orders surged to record levels at in the first quarter as booming demand in the mining industry more than offset faltering demand in the Asian market.
Sandvik jumped 12.5 percent, while Atlas rose 0.9 percent, helping the industrials sector up 1.2 percent.
Vinci added 4.2 percent after it lifted its 2012 sales target late on Thursday, after first-quarter revenue rose 6 percent on strong orders outside Europe and brisk construction business.
Yara, the world's largest maker of nitrate fertilisers, climbed 3.5 percent after reporting first-quarter results, while UK lender Barclays and Italian carmaker FIAT were up 4.7 and 4 percent, respectively, as brokers upped forecasts for both firms following recent results.
EARNINGS CHEER, MACRO FEAR
European stocks have enjoyed a better start to the quarterly earnings season, compared to the previous quarter, with 56 percent of the companies to have reported so far meeting or beating expectations, according to Thomson Reuters Starmine data.
"The markets have been overwhelmed by the extent of the earnings surprise. That's a very positive development and does mean that earnings expectations are going to be revised back up. That alone is a very persuasive support," said Mike Lenhoff, chief strategist at Brewin Dolphin
European shares were aided further when Wall Street opened higher than anticipated after weaker than expected open U.S. data, which U.S. economic growth cooled in the first quarter, was seen as a potential catalyst for further stimulus measures, which is a positive for equities.
"Today's advanced release of US Q1 GDP is the best-of-both-worlds for the Fed; sufficiently weak to unveil a new round of asset purchases (positive for stocks & risk appetite) and sufficiently strong to offset any purchases with sales on the short-end of the yield curve (sterilized version a la Operation Twist)," Ashraf Laidi, Chief Global Strategist, City Index commented.
The fallout from the credit crisis in 2008 and the ongoing debt problems in Europe and sluggish global growth, however, continues to weigh on financials. The sector has a market implied 10-Year earnings per share compound annual growth rate of -0.9 percent over the next ten years, according to Starmine data.
DNB, Norway's biggest bank, fell 10.7 percent after it said higher funding costs and tough new capital rules would make it difficult to meet its full-year profit target.