European financial markets closed on an upbeat note Friday despite a surprise rating cut on Italian government debt by Moody\'s. Although Moody\'s reduced its rating on Italian sovereign debt by two notches, bringing it dangerously close to junk bond status, Milan\'s FTSE MIB rallied to close up by 0.96% at 13,714 points. The FTSE All Share closed 0.87% higher. Moody\'s blamed liquidity risks in Italy as well as the ongoing European sovereign-debt crisis for its action. Milan was buoyed by a successful bond sale Friday morning when 5.25 billion euros in Italian medium- and long-term bonds were sold, including a new three-year issue. The sale included 10-year bonds, sold at average yields of 5.82%, which is lower than 6.19% yields from last month\'s bond sales. The BTP-Bund spread closed at Friday 479 basis points basis, slightly lower than the peak of 485 points earlier in the day, but still above Thursday\'s spread of 466 basis points. The 10-year yield, an important indicator of investor confidence in Italy\'s ability to weather the euro crisis, closed at 6% Friday. Meanwhile, London\'s FTSE 100 ended the week 1.03% higher at 5,666.13 points, in Frankfurt the DAX jumped by 2.15% to close at 6,557.1 points and in Paris, the CAC 40 was 1.46% higher, closing at 3180.81 points. In Madrid, the IBEX 35 rose slightly to close up 0.52% at 6,664.60 points.