The forward-looking consumer sentiment indicator from German think tank GfK, for December, inched up to 7.4, higher than the market expected 7.1. The December reading showed that consumer sentiment in Germany, Europe's strongest economy, is at its highest level in more than six years.

Market participants will be tracking developments in Italy, where former prime minister Silvio Berlusconi, convicted of tax fraud, faces a Senate vote on whether to expel him from Italian politics.

Elsewhere, in the UK, the government left the second estimate of third-quarter gross domestic product (GDP) unchanged at 1.5%.

US officials said that the two jets flew from the American island of Guam, entered China's Air Defence Identification Zone (ADIZ), and hovered over a group of islands at the centre of an increasingly bitter dispute between Beijing and Tokyo.

Government data showed that building permits for future home construction shot up 6.2% to a seasonally adjusted annual rate of 1.03 million units in October. That rate of increase is the highest since June 2008. Permits increased by 5.2% in the preceding month.

The Dow ended slightly higher at 16,072.80, a record finish for the benchmark index.

The S&P 500 finished slightly higher at 1,802.75.

The Nasdaq closed 23.18 points higher or 0.6% at 4,017.75, finishing above the 4,000 mark for the first time since 2000.