LONDON (MarketWatch) — European stock markets rose on Monday, as the French government successfully sold Treasury bills and investors shrugged off last week’s news that Standard & Poor’s downgraded the credit ratings of nine euro-zone nations, including France, Italy and Spain.

The pan-European Stoxx 600 index (SXXP) gained 0.8% to end at 251.12 after spending most of the session swinging between small gains and losses.

U.S. markets are closed Monday for Martin Luther King Jr. Day.

Ratings company Standard & Poor’s downgraded the credit ratings of nine euro-zone nations — including France, Austria, Italy and Spain — late Friday after the close of European markets. France, which was stripped of its prized triple-A credit rating, sold Treasury bills on Monday, with borrowing costs declining from levels seen a week ago.

European stocks finished marginally lower on Friday, showing minimal reaction to speculation about the impending downgrades, which had been expected by investors in recent weeks.

On Monday, European stocks climbed.

“Last week’s bad news is having little impact on the U.K. and European equity markets,” said Mike Lenhoff, chief strategist at Brewin Dolphin.

“This might be because the bad news was mostly discounted,” he said in a note. Or it might be because Wall Street is closed on Monday and investors are waiting for U.S. earnings news, he added. “If earnings prove to be at least as good as expected and maybe a touch better, Wall Street can be expected to lead equity markets up,” Lenhoff said.

S&P lowers France's credit rating

The French CAC-40 index (PX1) rose 0.9% to 3,225, with shares of semiconductor firm STMicroelectronics N.V. (STM) rallying 7.2%.

French bank shares also posted gains; Societe Generale S.A. (GLE) climbed 1.3%, Credit Agricole S.A. (ACA) gained 1.1%, while BNP Paribas S.A. (BNP) rose 1.6%.

The U.K.’s FTSE 100 index (UKX) climbed 0.4% to 5,657.44, as media and publishing company Pearson PLC (PSON) rose 2.7%.

Carnival shares sink

The biggest loser in the FTSE 100 was cruise firm Carnival PLC (CCL) CUK, -0.70% CCL, -1.56% . Its shares sank nearly 17% in London, after the company’s Costa Concordia ship ran aground off the coast of Italy on Friday, resulting in the deaths of at least five people.

Carnival, whose shares are traded both in London and New York, said on Monday that the disaster will cost the company between $85 million and $95 million in lost earnings. The company also expects other costs to the business that it said it can’t determine at this time. Morgan Stanley downgraded Carnival to equal weight from overweight Monday and cut its earnings estimates for the company. Read more about Carnival.

Another big decliner in Europe was Lundin Petroleum AB (LUPE). Its shares fell 14.3% on Monday in Stockholm after the Swedish oil and gas firm said that oil resources at its Avaldsnes discovery off the coast of Norway may be lower than first estimated.

In Germany, the DAX 30 index (DAX) rose 1.3% to 6,220.01, supported by a 3.6% gain for car maker Daimler AG (DAI) and a 2.6% rise for rival BMW AG (BMW).

Goldman Sachs on Monday reiterated its conviction buy recommendation on car makers BMW and Fiat SpA (F), and added Daimler to its conviction-buy list. The broker also upgraded premium tire maker Pirelli & C. SpA (PC) to buy and added it to its conviction-buy list. In addition, Goldman upgraded Italy’s truck and agricultural-equipment firm, Fiat Industrial SpA (FI), to buy and French auto group Renault SA (RNO) to neutral.

In Milan, Fiat jumped 7%, Fiat Industrial rose 3.9%, and Pirelli climbed 4.9%. In Paris, Renault gained 2.9%.

In Swiss trade, shares of Richemont (CFR) rallied 2.8% after the luxury-goods group reported a 24% surge in sales for the October-December quarter after seeing solid growth across all regions.