By Will Horner and Corrie Driebusch

U.S. stocks rose Friday as a rare intervention by Chinese regulators calmed investors following disappointing economic data on China growth.

The Dow Jones Industrial Average rose 206 points, or 0.8%, to 25586 in recent trading, a bounceback that put the index on track for weekly gains after a bruising day Thursday. The S&P 500 added 0.96% while the Nasdaq Composite gained 1.2%.

The gains came on the heels of an eventful trading session in Asia. The Shanghai Composite initially fell after data showed China's third-quarter gross domestic product was the weakest since the global financial crisis. Throughout the day, China's economic czar, central-bank governor and banking and securities regulators all came out calling for confidence in China's economic outlook. Shares rallied, with Shenzhen A Shares and the Shanghai Composite both up 2.6% after the intervention.

In the U.S., stocks were lifted in part by some positive earnings reports.

Shares in PayPal jumped 11% after the company boosted its outlook for the fourth quarter. Meanwhile, Procter & Gamble reported its strongest quarterly sales growth in five years, and shares rose 6.4%.

"Investors are faced with the good, the bad, and the ugly," said Katie Nixon, chief investment officer of Northern Trust Wealth Management, referring to the recent swings in major U.S. stock indexes. "On the good front, we've had some very good momentum on earnings." The bad, however, is rising interest rates, she said, and the ugly includes heightening trade tensions with China, which has the potential to further rattle markets around the globe.

Indeed, investors in Asia are still nervous of the brewing trade war between the U.S. and China and the yuan's steady depreciation, said Sophie Huynh, cross-asset strategist at Société Générale , but she added that looking ahead, Chinese equities still have something to offer.

"We think that China is a medium-term bullish story and we would keep Chinese assets in portfolios," Ms. Huynh said.

European stocks slipped Friday, with Italian assets under pressure, dragged down by a simmering confrontation between Italy and the European Union over the nation's proposed budget.

The Stoxx Europe 600 added 0.1%, dragged lower by European tire manufacturers who were hit hard after Michelin lowered its outlook for the year and warned that a decline in European and Chinese sales was set to continue into the fourth quarter.

Shares in the French tire-maker fell 8%, while shares in its German counterpart Continental were also dragged down by the warning, falling nearly 5%.

Overvalued equity markets coupled with trade war fears, rising oil prices and concerns over future U.S. monetary policy were prompting a selloff, said Peter Dixon, global financial economist at Commerzbank.

"Under those circumstances, I think if we saw one of the dominoes fall, one of the markets tip over, then there are fears of contagion," he said.

In Europe, the clash between Italy's populist coalition government and the European Commission continued to spook investors. The two parties are at odds over Italy's proposed budget.

In a letter published Thursday, the European Commission said Italy's spending plans were "unprecedented" and a "serious concern."

The Italian FTSE MIB was down 0.83%. The yield on the Italian 10-year note was up around 0.1% at 3.75%, according to Tradeweb. Yields move inversely to prices.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

(END) Dow Jones Newswires

October 19, 2018 10:27 ET (14:27 GMT)

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