European stocks climbed for a fifth day after a capital injection into Countrywide Financial Corp. reassured investors the fallout from the global credit rout will be limited.
Siemens AG, the region's largest engineering company, and Sodexho Alliance SA, the world's second-largest caterer, paced gains among businesses most sensitive to economic growth. HBOS Plc and Northern Rock Plc led an advance by mortgage lenders.
``It's a significant vote of confidence,'' said Simon Carter, who helps oversee $3 billion at Aegon Asset Management in Edinburgh. ``The subprime problem now looks more contained.''
The Dow Jones Stoxx 600 Index added 0.2 percent to 369.33, giving the gauge its longest winning streak since the five days ended May 7. The Federal Reserve reduced its discount rate Aug. 17 and Countrywide, the biggest U.S. mortgage lender, said yesterday it sold $2 billion of preferred stock to Bank of America Corp. to shore up finances.
The Stoxx 600 dropped more than 10 percent from June 1, when it reached a 6 1/2-year high, to Aug. 16 on concern that the subprime-mortgage rout in the U.S. will spread, making financing for companies and consumers more expensive.
``This $2 billion deal is very significant and bolsters Countrywide's financial position and reduces the possibility of the subprime problem extending into the wider economy,'' said Bob Parker, vice chairman of Credit Suisse Asset Management in London, which oversees $502 billion.
National Markets
National benchmarks advanced in all of the 18 western European markets except Spain. The U.K.'s FTSE 100 rose less than 0.1 percent, Germany's DAX gained 0.2 percent and France's CAC 40 climbed 0.1 percent. Europe's Stoxx 50 increased 0.1 percent, while the Euro Stoxx 50, a measure for the euro region, was little changed.
The Stoxx 600 earlier increased as much as 1.3 percent, paring gains after U.S. markets slipped in early trading today. Asian markets rallied for a fourth day.
The risk of owning corporate bonds fell to the lowest in a month after the Bank of America invested in Countrywide, according to the iTraxx Crossover Series 7 Index of 50 companies with mainly high-risk, high-yield debt.
Siemens added 0.9 percent to 91.66 euros. Sodexho Alliance climbed 2.6 percent to 47.86 euros.
HBOS, Britain's largest mortgage lender, climbed 2.1 percent to 898 pence.
Holcim, BHP
Northern Rock rose 4 percent to 757 pence. The shares had lost almost a fifth of their value in the first two weeks of August after creditors cut access to short-term debt markets and raised concern that higher borrowing costs would crimp Northern Rock's profit.
The yen dropped the most in three years against the euro as stocks rallied, giving investors confidence to buy riskier assets using the so-called carry trade.
Holcim Ltd. added 0.8 percent to 122.7 Swiss francs. The world's second-biggest cement maker said first-half profit almost tripled on demand from India, China and other emerging markets.
Tullow Oil Plc climbed 2.4 percent to 494.75 pence. The U.K. oil exploration company aiming to start production in Ghana by 2012 discovered oil at its Mputa-3 well in Uganda.
Umicore SA advanced 3.1 percent to 162.92 euros. The world's largest precious-metals recycler said first-half profit surged 77 percent, bolstered by sales of precious metals and autocatalysts.
Premier Foods
Premier Foods Plc rose 1.2 percent to 231.75 pence after UBS AG lifted its recommendation on shares of the U.K. maker of Branston condiments and Hovis bread to ``buy'' from ``hold,'' citing the potential for an earnings recovery.
SIG Plc increased 0.7 percent to 1,234 pence. UBS raised its recommendation on Britain's biggest supplier of insulation and roofing materials to ``neutral'' from ``sell,'' citing ``SIG's exposure to insulation, which should see growing demand.''
Genmab A/S climbed 6.5 percent to 327.5 kroner. Bear Stearns Cos. upgraded the shares of the Danish biotechnology company to ``peer perform'' from ``underperform.''
The stock is now fairly valued after delays of ``pivotal'' data on its HuMax-CD20 and HuMax-CD4 drugs have been priced in, London-based analyst Melissa Gallagher wrote in a note.
Kuoni Reisen Holding AG fell 7.4 percent to 625 Swiss francs, the biggest one-day drop in more than four years, after the largest Swiss travel company unexpectedly reported a 57 percent decrease in first-half profit on lower sales of all- inclusive beach vacations.
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