European auto stocks gained, led by Bayerische Motoren Werke AG, after a report showed German factory orders unexpectedly rose in November. Carrefour SA fell after Europe's largest retailer said sales growth slowed at its main business.
The Dow Jones Stoxx 50 Index gained 2.85, or 0.1 percent, to 2,487.11, erasing an earlier decline of as much as 1.2 percent. The Stoxx 600 added 0.2 percent.
"We are optimistic about equity returns for this year," said Matthias Fankhauser, who helps manage SF20 billion (US$14.4 billion) at Bank Hofmann AG.
"We will change our bets to more economically sensitive shares as we see" more positive economic reports.
Stock indexes fluctuated between gains and declines throughout the day as investors evaluated different economic figures. They recovered from losses sustained after a report showed the biggest drop in US jobs since February.
Nine of Western Europe's 17 benchmark indexes advanced, led by Stockholm's OMX Index, which climbed 1.3 percent. The UK's FTSE 100 added 1 percent and France's CAC 40 climbed 0.3 percent. Germany's DAX slipped 0.35 to 3,037.33.
BMW, the world's second-biggest luxury carmaker, rose 2.1 percent to 29.10 euros. Volks-wagen AG, Europe's largest automaker, added 2.1 percent to 36.36 euros. DaimlerChrysler AG, the world's No. 5 car company, advanced 0.1 percent to 29.76 euros.
Invensys Plc, which sells factory controls in Europe and the US, climbed 7.8 percent to 58.5 pence.
Orders to German factories rose 1.7 percent from October, the biggest increase in six months, the government said. Economists had forecast a drop of 0.6 percent. Factory production accounts for about a fifth of Europe's largest economy.
The Stoxx 50 has fallen 1.2 percent in the past five days amid concern that waning consumer spending may stall an economic recovery and cut corporate profits. The retailers Dixons Group Plc and Metro Group this week said results missed analysts' forecasts, and a government report showed European consumer confidence was at a 5 1/2-year low last month.
Carrefour dropped 4.7 percent to 40 euros, the biggest decline since August. Sales at out-of-town French superstores increased 1.7 percent in the fourth quarter, down from 2.5 percent in the third, the company said.
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