The latest US economic data underpinned the view of a sustained recovery.
New home sales jumped 18.6 per cent to a seasonally adjusted annual rate of 504,000 units in May, according to Commerce Department data. Separately, the Conference Board's consumer confidence index climbed to 85.2 in June, the highest reading since January 2008, and up from 82.2 in May.
"This is convincing evidence that the economy continues to expand," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York, told Reuters. "It takes a lot of confidence to buy the biggest of big ticket items consumers ever face, buying a new home."
To be sure, the S&P/Case-Shiller index of property values rose 10.8 per cent from April 2013, the smallest 12-month increase in more than a year.
Shares of Vertex Pharmaceuticals soared, last up 40.5 per cent, after the biotech company said trials showed promising results in improving lung function for people with cystic fibrosis.
"The combination of lumacaftor and ivacaftor is the first regimen designed to address the underlying cause of CF for people with the most common form of the disease, and based on these data, we plan to move as fast as possible to submit applications for approval of this combination regimen in countries around the world," Jeffrey Chodakewitz, chief medical officer at Vertex, said in a statement.
In Europe, the Stoxx 600 Index finished the day with a 0.2 per cent decline from the previous close, as did the UK's FTSE 100. France's CAC 40 eked out a 0.06 per cent gain, while Germany's DAX rose 0.2 per cent.
In Germany, the Ifo institute's business climate index slid to 109.7 in June from 110.4 in May.
The British pound fell after Bank of England Governor Mark Carney suggested interest rates might not rise as soon as thought by pointing to the fact that wages were not rising as quickly as the central bank had anticipated. It was Carney himself who earlier this month sparked expectations of a potential rate increase this year.
"An early rate hike may not be a done deal as yet," Valentin Marinov, head of G10 currency strategy at Citi, told Reuters.