European stocks climbed as a government report showed the US economy, the world's biggest, grew more last quarter than reported a month ago. Insurers, the worst-performing European companies this week, gained the most as Aegon NV and ING Groep NV rose.
"Everybody in Europe is relying on an American recovery," said Peter Braendle, who manages SF1 billion (US$740 million) at Swissca Portfolio Management in Zurich. The growth report "is important. European companies may benefit because of business they do in the US."
The Dow Jones Stoxx 50 Index climbed 1.7 percent to 2,165.44.
The Stoxx 600 Index added 1.6 percent to 181.75.
The Stoxx 50 fell 2.5 percent over the past five days, for a 10 percent drop this year. The Stoxx 600 lost 2.3 percent for the week, taking its drop for the year to 9.9 percent. For both, it was the worst January-February since calculations began in 1987.
The US economy grew at a 1.4 percent annual rate in the fourth quarter, the Commerce Department said, double the rate reported a month ago. A factory index maintained by the National Association of Purchasing Management-Chicago fell less this month than analysts polled by Bloomberg News had estimated.
Benchmarks rose in Western Europe's 17 markets, led by the Amsterdam Exchanges Index's 3 percent advance. The UK FTSE 100 gained 2.4 percent, the German DAX rose 1.4 percent and the French CAC 40 Index climbed 1.4 percent. Nine Stoxx 600 shares advanced for every two that declined.
Aegon, the second-largest Dutch insurer, rose 8.5 percent to 9.95 euros, leading Stoxx 50 gains. The insurance group has dropped the most since last Friday's close among the 18 Stoxx industry groups, sliding 5.7 percent.
ING, the biggest Dutch financial-services firm, added 6.8 percent to 12.55 euros. Munich Re, the largest reinsurer, climbed 4.9 percent to 83.58 euros.
Shares have tumbled this year as consumers and businesses postpone spending decisions amid concern about a possible US-led attack on Iraq. Higher crude-oil prices have helped to delay an economic rebound in Europe, and gains by the euro against the dollar have cut into earnings from European companies' US units.
The Stoxx 600's drop this year has wiped about 460 billion euros (US$496 billion) from the market value of its members. That's around 3.5 times the value of BP Plc, Europe's No.1 company by that measure. The index is headed for a fourth consecutive annual loss, as is the Stoxx 50.
ABB Ltd, Elan Corp and Royal & Sun Alliance Insurance Group Plc, among this week's worst performers in the Stoxx 600 at Friday's close, posted some of the biggest gains.
ABB, the biggest European electrical-engineering company, climbed 10 percent to SF2.81. Elan, Ireland's largest drugmaker, added 15 percent to 3.10 euros. Royal & Sun, the No.2 British car and home insurer, rose 9.2 percent to 71.5 pence.
Cap Gemini SA jumped 16 percent to 24.30 euros. Europe's largest computer-services company reported 2002 operating profit, or earnings before interest, tax and amortization, of 114 million euros, better than the 74 million euros expected by analysts.
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